The entrepreneurs support the transfer of insurance contributions administration to the FTS
Moscow, July 11, Prime. The majority of the Russian entrepreneurs support the transfer of insurance contributions administration to the Federal Tax Service (FTS) in the hopes that if a single fiscal body is determined, the administrative burden and the amount of checks will decrease, as will the reporting volumes, and unified rules and procedures of administration will be fixed.
In June, President of Russia Vladimir Putin charged the Government with defining the usefulness of restoring insurance contributions administration to the FTS. The Ministry of Economic development and the Ministry of Finance have already supported the idea.
The Unified Social Tax (UST) exacted by the tax service was revoked in 2010. Compulsory insurance contributions to the state extra-budget funds replaced it. Those funds also received the functions of administration of the payments. The contribution rate was increased from 26% to 34% on January 1st of 2011. However, that decision was reviewed later, and the rates were lowered to 30% with an additional rate of 10% for the salaries over 512 thousand roubles in 2012 and 537 thousand roubles in 2013.
TO THE “SINGLE WINDOW” EVERYONE
The social organizations “Russia’s Bulwark” and “Business Russia” conducted a survey, in which almost 50% of the entrepreneurs supported the idea of transfer of insurance contributions administration to the Federal Tax Service. Sergey Borisov, Head of the Board of Guardians of the “Russia’s Bulwark”, told the PRIME Agency of this. Over 1,3 thousand small and medium businessmen from the Russia’s regions took part in the survey.Borisov says: “The business votes for the “single window”. The world experience shows that the administration of fiscal levies is done by the tax authorities”.
Accountants today form and submit similar reports actually to three places: tax service, the Pension Fund that administrates its own contributions and compulsory medical insurance contributions, and the Social Security Fund, which deals with its own profile contributions. The experts comment: “It should be pointed out that administration of payments with similar bases (IIT and insurance payments) by various bodies, as it is done today, practically impedes the comprehensive approach to the payments”.
On the other hand, the attitude of businessmen towards the tax authorities has changed significantly over the last few years: up to 70% of entrepreneurs used to complain about the problems of tax payments, while the latest survey, according to S.Borisov, shows that the number of those dissatisfied with the tax administration has become 7 times lower.
He explains: “It has become a completely different body, fully comprehensible, with a well-tuned feedback”. He also adds that, taking this into account, there is no wonder that the entrepreneurs prefer that the tax service be the single administrator of taxes and social contributions. For now, only preliminary results of the survey are available, and the more detailed information will be published on July 15.
TO COLLECT EVERYTHING FROM EVERYONE
The analysts point out the fact that the tax authority has all necessary instruments and methods, which allow collecting taxes and other compulsory payments in a more efficient way than other institutions.
Evgeny Yasin, Academic Supervisor of the HSE, points out: “The advantages of the transfer of administration are that the FTS has competencies, but those only include collection of payments. It is important that additional duties not be imposed on it – for example, concerning the improvement of methods, rate amounts etc”.
Dmitry Manuylov, Associate of the Tax and Customs Law Practice of the Law Firm "YUST", agrees: “The FTS of Russia is more experienced at administering than the public extra-budget funds, and this cannot but affect the efficiency of the administration”.
Three years have passed since the day the unified social tax was revoked and the administration of insurance payments was given to the public extra-budget funds. During that time, the debts of insurance contributions for retirement insurance grew 97 billion roubles, for medical insurance – 19 billion roubles, and the IIT debts only grew 2,4 billion roubles.
The Pension Fund budget for 2013 will be of 6,3 trillion roubles, and the transfer from the federal budget equals 47% of all the Fund’s income (2,9 trillion roubles).
BUDGET BONUSES
The experts rate the economized funds for both the entrepreneurs and the State as one of the advantages of the transfer of administration of the insurance contributions to the FTS. Andrey Manko, an expert of RIA Rating, points out: “The business’s operational expenses related to the payment of taxes and duties may decrease a small amount. Besides, the spending of the State on administration may also decrease a bit, and the amount of the money collected will increase”.
A number of experts are convinced that it should not be a simple return to the mechanism that was active three years ago, and that certain amendments need to be made to the system of collection of contributions and interaction of the FTS and the PFR. Alexey Kudrin, former minister of finance, the head of the Civil Initiative Committee, told Prime: “(The transfer of the administration) is possible, but a joint functioning mechanism may be created. Not as it was earlier, but with complementarity”.
In particular, the opponents of the idea of the transfer pointed out the problem of “suspension” of the contributions at the FTS. In other words, the PFR and other funds will receive money a bit later as compared to the currently active scheme, which will ultimately affect the final recipients (pensioners and social sphere institutions). A.Manko says: “Therefore, strict time limits for the transfer of the collected money to the extra-budget funds should be fixed for the FTS, should the decision be taken”.
The expert of RIA Rating says that it should also be taken into account that the PFR needs to receive information on every separate worker in order to maintain individual personal accounts, therefore much laborious work of ensuring cooperation between the PFR and the FTS will be needed.
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