The Commissioner for the Protection of the Rights of Entrepreneurs Boris Titov sent a letter to Russian President Vladimir Putin with a proposal to establish a special tax regime for public catering, “USN-public catering”, as well as reduce from 20% to 10% or completely zero VAT for the industry. This was reported on Friday by TASS in the press service of the business ombudsman.
“For catering, a special tax regime can be created based on a simplified taxation system, the so-called USN-catering with a progressive scale. For enterprises with annual revenues of up to 800 million rubles, it is proposed to keep the current tax rates at 6% and 15% (on the bases of “income” and “income minus expenses”, respectively), for enterprises with revenues from 800 million rubles to 2 billion rubles – to set rates in 8% and 20%, respectively, with an increase in the permissible number of employees, ”the letter says, excerpts from which were cited by the press service.
Titov also suggested thinking about “the possible abolition of VAT for enterprises in the industry, or its reduction to 10%.” The main food products purchased by cafes and restaurants are subject to VAT at the rate of 10%, he recalled.
According to the business ombudsman, the implementation of such measures will create conditions for preserving the industry, attracting new investments into it, whitewashing the market with an increase in the level of declared revenue. He noted that the results of the experiment can be used to create incentive tax conditions in other industries.
Motives of appeal
The ombudsman argued his initiatives by the fact that since the introduction of the first sanitary restrictions due to the situation with the coronavirus pandemic, the revenue of industry enterprises in various months has decreased by 50% or more. According to various estimates, 20% of enterprises in the industry have closed, this process continues against the background of decreased demand, he said.
“And before the pandemic, there were imbalances in the catering industry associated with the application of various tax regimes. For enterprises operating in the legal field and using a common taxation system (that is, for growing small and medium-sized companies), the activity is actually unprofitable, which limits the possibilities for scaling up the business and provokes its fragmentation schemes, ”Titov said.
In his opinion, “it is possible to create conditions for the growth of catering companies, their gradual transition from the categories of micro-business and small business to the category of medium and large companies, by changing the mechanisms of tax regulation.”
Russian news agency TASS