President of Russia Vladimir Putin: Mr Mishustin, to begin with, I would like to extend my greetings to you and all the other customs workers.
One of the main jobs the state has is to replenish the budget because the implementation of social commitments, state investments and national projects depends on this.
I send my greetings to your workers and wish them every success.
What can you say about your performance?
Head of the Federal Customs Service Mikhail Mishustin: Thank you, Mr President.
Between January and October, we have transferred 17.6 trillion rubles to Russia’s consolidated budget. This is 22.9 percent or 3.3 trillion rubles more than in the same period of last year.
Vladimir Putin: This is indeed good news.
Mikhail Mishustin: Yes, it is most important and we have achieved this goal without raising the rate of budget revenue generating taxes. We expect the figure will have reached 4 trillion rubles by the close of the year.
Vladimir Putin: How did you achieve this?
Mikhail Mishustin: Of course, the oil severance tax did its part, considering that prices rose from 50 to 70 dollars per barrel. But if we look at individual contributions, we will see that half of the growth came from non-oil and gas revenues.
The profits of companies that are doing well have increased by 30 percent over a period of nine months, and hence profit tax revenues have risen by 23 percent.
VAT payments have increased by 14.1 percent and personal income tax by 12.5 percent. This is some 1.5 percentage points above the wage growth rate. In general, all these figures are proof that we are meeting the targets that are stipulated in the law on the Federal Budget.
I would like to say that the most important thing is that we are trying to achieve these goals analytically. We have seriously reduced the number of inspections. The additional revenue collected through the application of analytical methods is estimated at 345 billion rubles.
The key to such a method is an automated system for monitoring VAT refunding. We have connected our systems to the customs service, as per your instructions.
Our system is monitoring the total customs cost of imports and 100 percent of VAT offsets on imported goods. According to the analytical data provided by the customs service, the figure stands at some 77 billion rubles and this without any special inspections.
We also share access to the risk management system with the customs service and are coordinating our operations rather closely.
I would also like to say a few words about online cash registers. It was one of your instructions, and we carried out an experiment. We are currently in the second phase of transferring companies to online cash registers.
Over this period, over 835,000 taxpayers have installed such cash registers, so that the total figure has reached 2.3 million. This is twice the pre-reform figure, which means that our businesses have accepted this technology. There are hardly any complaints.
This system is currently used to monitor some 2.5 trillion rubles worth of retail trade a month. We see an increase of about 60 percent in retail trade, which indicates that its operations within this system are absolutely transparent.
You have also instructed us to ensure the opportunity to provide online information to the tax services. We can see that this technology is being widely used and is producing a cumulative effect in terms of taking this sector out of the shadows.
I would like to say a few words about the self-employed. A law has been drafted and adopted by the State Duma in three readings to launch an experiment involving the introduction of the taxation of self-employed individuals, or professional income tax, in four Russia regions – Moscow, Moscow Region, Tatarstan and Kaluga Region.
Some people interpret it as an increase in the tax burden. This is not the case. This is an opportunity for taxpayers from the group of self-employed individuals to use this system.
Speaking about the definition of self-employed individuals, these are Russian citizens who do not have an employer and do not hire workers and who earn up to 2.4 million rubles a year.
Therefore, the tax for self-employed private individuals will be 4 percent and for self-employed business entities 6 percent. They will not need to register with the tax service, fill out tax declaration forms or pay a required premium.
We believe that no penalties should be imposed during this year-long experiment. Mr President, we would like to ask you to support this idea, so as to observe over the year how the self-employed will use this system and subsequently report to you on any new details we may come across.
Vladimir Putin: Of course, I do not see why not. This is what we should do.
How are the online systems of the tax and customs services being combined?
Mikhail Mishustin: As I have already pointed out, we have completed a highly important stage. We have finished working on three of the most important parts.
First of all, we have obtained all data from the Federal Customs Service as regards customs value data during the import of goods, and we have entered this data into the automated system monitoring VAT refunds. Actually, we can now track all imports, and we can also monitor VAT refunds during the export of goods.
Second, we have exchanged risk management systems. Today, the customs service and the tax service can both track taxpayers’ profiles. In effect, we know our colleagues’ questions to those involved in foreign economic operations; and they can see the tax service’s risk profile.
And, finally, we have coordinated our inspections. In the event of such risks, we carry out a few of these coordinated inspections. Mr. President, I would like to say that we have completed the first stage.
Vladimir Putin: We need to come to an agreement with our foreign partners, so that their customs agencies would provide us with objective data regarding the value of goods being exported to Russia, so that you could take this into account together with the customs service.
Mikhail Mishustin: Yes.
And one more thing: Mr President, on the eve of our professional day, we wanted to tell you that we would like to abolish transport and land value tax declarations for legal entities.
We will discuss the relevant bill with Mr Anton Siluanov [First Deputy Prime Minister – Minister of Finance]. We will suggest it, and we hope that you will support and sign the document.
Vladimir Putin: Fine.
<…>