The Russian business is against the initiation of tax cases bypassing the FTS

Moscow, October 15, Prime. The Russian business community is convinced that the possibility to initiate criminal cases following the results of the investigative measures, and not only according to the materials provided by the tax authorities, will contribute to the deterioration of the business climate. NGOs will soon put forth their suggestions and remarks on the matter.

Last week, President Vladimir Putin submitted to the State Duma for consideration a draft law, pursuant to which the materials of tax investigations cease to be the only basis for initiation of criminal cases on tax offences. The explanatory note to the draft law states that the effectiveness of solving tax offences in Russia is currently low.

The business community doubts that the crime solving rate will grow if such innovation is enacted. The entrepreneurs believe that it will result in the deterioration of the business climate, which the Russian authorities area allegedly struggling to improve, in the growth of corruption and in the new ways to “stifle” honest entrepreneurs.

“Business Russia” is planning on prompt submission of amendments protecting the entrepreneurs. “Bulwark of Russia” is studying the situation and is also making up its propositions.

Dangerous job

Marina Zaykova, Chairman of the tax committee of “Business Russia”, voices her opinion to PRIME”: “Our policy in the matter is a strange one: on one hand, we seem to alleviate. For example, we amend the fraud article, we hold an amnesty. On the other hand, alleviations are followed by such countermeasures. And the profession of the entrepreneur remains risky and unpopular”. Sergey Borisov, head of the Supervisory Council of “Bulwark of Russia”, agrees with her.

In his opinion, the tax service only is sufficient to deal with the tax offences. S.Borisov says: “There is one body that does the job efficiently, transparently and in a technologically advanced way. It is perhaps unwise to endow the investigation authorities with similar rights, because they lack the competencies of tax inspectors”.

He believes that the novelty will put additional pressure on the business. He believes: “Why open a parallel conduit that will create havoc and chaos? Each law enforcer may put any entrepreneur to his knees: micro business for a sublieutenant, small business for a first lieutenant, medium business for a captain”.

A step backwards.

S.Borisov describes the draft law: “This is a step backwards, a fallback away from our achievements”.

Prior to 2011 the Penal Code enabled initiation of criminal cases without checks by the tax authorities. Absurd situations occurred in practice, when an organization, according to the data of the tax inspectorate, overpaid its taxes, and a criminal case for “tax evasion” against its head was in course. Only in 2011 did the Federal Law No. 407-FZ enter into force, limiting the motives for initiation of criminal cases on tax offences.

The return to the previous edition of the Penal Code of Russia may be explained by the deterioration of the statistics of solved tax crimes. However, according to the experts, statistics do not always show the actual reality.

Dmitry Manuylov, Associate of the Tax and Customs Law Practice of the Law Firm "YUST", points out: “In consideration of the fact that criminal cases in Russia are still an effective means to pressure business, it is possible that dishonest interested persons may avail themselves of those amendments to the Penal Code in order to seize businesses or to effect pressure on them”.

When no transition from quantity to quality occurs

He believes that the planned changes will doubtlessly increase the number of initiated criminal cases on tax offences, but has difficulties foretelling any resulting improvement in the case solving.

D.Manuylov adds that the cases involving the so-called “one-day” firms are responsible for a large share of non-solved tax crimes that occurred in the last few years. Significant damages to the budget are the result of this category of cases. He says: “The expansion of motives to initiate criminal proceedings for tax crimes <…> will hardly change the actual situation in the economy”.

The analysts of "RIA Rating" believe that the novelty may also have a positive effect. Sergey Yarkoev says: “In theory, this may lead to the improvement of solving tax crimes and result in the decrease of their number and the volumes of damages”.

He points out that efficient implementation of the law requires highly qualified officials of the law enforcement agencies in the sphere of taxation and finances as well as the absence of incentives to use such criminal case for corruption purposes, which demands for an improvement of transparency and responsibility of authorities.