President of Russia Vladimir Putin: Mr Yegorov, good afternoon.
Head of the Federal Taxation Service Daniil Yegorov: Good afternoon.
Vladimir Putin: Mr Yegorov, the main question is this: how is the work progressing? How is tax collection?
Daniil Yegorov: Mr President,
Over the first ten months, we can see that the budget system remains stable. The key source of this stability is non-oil and gas revenues. Looking at the ten-month results, we are up by 3.5 trillion rubles – an 8 percent increase – bringing the total to 49 trillion rubles.
As for the federal budget, growth is somewhat lower at five percent, since historically the federal budget has always had a large share of…
Vladimir Putin: Oil and gas.
Daniil Yegorov: Exactly. It has traditionally included a large share of oil and gas revenues.
What is noteworthy is this: non-oil and gas revenues in the federal budget have increased by three trillion rubles, while oil and gas revenues have dropped by two trillion. This means that, even with overall budget growth, oil and gas revenues now account for only 30 percent of the federal budget revenue. Given that the budget is still expanding, this is a clear indication of its stability.
As for our year-end outlook, we expect the federal budget to end the year with eight percent growth, reaching roughly 27 trillion rubles, which is fully in line with the forecasts built into the budget. That covers the budget situation.
With regard to our work, first, this year we have gone through all the changes and, I believe, did so quite successfully. The ones that took place last year, in particular, the amnesty that you announced in your Address to the Federal Assembly. This year, we can sum up preliminary results; about 25,000 companies have, in effect, qualified for the amnesty and have taken advantage of it. That is over 11,000 groups of taxpayers.
What has this led to? On the one hand, they saved roughly 20 billion rubles in taxes. On the other hand, this year we expect over 23 billion rubles in tax revenue, which also appears significant.
Moreover, we are following the same strategy that we chose at the outset: we are doing our utmost to provide the most comfortable environment for doing business with minimal barriers.
What are we focusing on, in particular, in our oversight work? This year, we crossed a Rubicon. With regard to the risks we show to taxpayers, the risks we identify in their activity and let them know about them, more than 55 percent of taxpayers made corrections on their own this year, without any enforcement measures on our part. So, we are now past the half, and I believe we have reached stability in our work that has fundamentally changed the rules in terms of tax behaviour and tax payment practices.
Vladimir Putin: Essentially, this is what we – you – were striving to achieve, correct?
Daniil Yegorov: Exactly so.
Vladimir Putin: You were transforming the system of engaging with taxpayers. This was your goal.
Daniil Yegorov: I think this is a more civilised form of communication, where the costs are lower both for businesses and for us, provided that we hear what each of us has to say and respond accordingly.
Speaking of hearing each other, we had been asked why, on the one hand, we reduced on-site audits, but, on the other hand, started requesting a large number of additional materials, documents, and clarifications from taxpayers. We worked hard on it and have now achieved a reduction of almost 40 percent in such requests.
That is, we no longer ask to provide more than 2.5 million documents. Our in-house data is enough for us to make our projections and build our own analytical assessments with regard to taxpayer operations.
Importantly, this year we completed automation of debt collection. It is now automated, and as a result we have achieved a 24-percent increase in collections, a significant figure with a sharp decline in human involvement.
At the same time, we have made substantial investment in debt management and created tools that allow taxpayers to obtain tax return extensions provided that we see adequate amounts of collateral and that the overall financial condition of the enterprise suggests it can continue operating.
This has led to the following: on the one hand, we have granted instalment plans and payment deferrals totalling over one trillion rubles; on the other hand, this step helped retain over two million jobs. And these companies subsequently paid more than two trillion rubles in taxes. This helps us maintain a balance by ensuring, on the one hand, rigorous collection measures, while, on the other hand, we offer legal extensions.
Vladimir Putin: Importantly, you cut the audit time and the number of required documents.
Daniil Yegorov: Yes, and this is the most important part of it, which allowed us to improve the overall effectiveness of the system.
Perhaps, last, but not the least, we engage in deep international cooperation. This year, we saw that in 2021, Western countries accounted for 80 percent of our transactions and 70 percent of our trade; after exchanging documents with our partners, the situation has reversed.
Now, 80 percent of our trade and payments are with partner countries, and only 20 percent with Western countries, meaning the economy has changed. Naturally, we are reacting to this.
We have agreements in place with several countries. New agreements have been signed with the UAE and Malaysia; agreements are underway with Oman and Qatar to ensure, on the one hand, the protection of investment, and on the other, the exchange of information to avoid double taxation, while also avoiding situations where no taxes are levied altogether. We now have a clear leader, the United Arab Emirates. Our companies have over one trillion in assets in the UAE.
We also have CFCs, controlled foreign companies, owned by our corporate or individual residents. Since 2021, their number has increased by 16 percent, meaning that individuals and corporations continue to open businesses outside Russia. Cyprus, which has for many years been a classic safe haven, has dropped by 30 percent, while other partner countries, especially in the EAEU, have grown many times over.
In this regard, we see great opportunities in our work and are working on our mission to provide comfortable environment and ensure proper taxation on both sides.
Vladimir Putin: Good.
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