| Deputies did not like tolling Early next week, the State Duma Committee on Budget and Taxes will discuss amendments to the Tax Code. Initially, it was assumed that all of them (the bill contains more than 100 pages) would be of a “technical” nature and fill the gaps that were identified after the adoption of the code. However, as it turned out, among the amendments there is one that can seriously change the rules of the game for many Russian industries. We are talking about an actual ban on external tolling.
Several waves of property redistribution in the Russian aluminum industry, accompanied by noisy PR campaigns, turned the word “tolling” almost into an obscene curse. And the advertising campaign, carried out in the fall of 1999, on the eve of the final stage of industry consolidation, convinced the public that it was impossible to imagine a worse evil than tolling. However, it was possible to understand that it was a question of competition, and the debate about tolling soon subsided, especially since the problem itself was partially resolved. From the beginning of 2000, internal tolling was abolished, and companies that still operated under external tolling were obliged to pay VAT when importing customer-supplied raw materials into Russia. The funds were returned to the tollinger after the finished goods were exported outside the country.
Today, the problem of using raw materials supplied by customers looks completely different. If two years ago the struggle over the taxation of tolling operations had a pronounced political overtones, now it is exclusively the economic aspect that is affected. First of all, we are talking about finding a balance between the interests of producers (and not just one, but several industries at once) and the fiscal interests of the state. After all, if you oblige the tollinger to pay 20% VAT plus customs duty when exporting goods abroad, you will get a very good increase in the budget. According to the State Customs Committee, Russia exported aluminum alone in the amount of $3 billion in January-October last year. Meanwhile, tolling is also actively used in light, chemical, oil refining and a number of other industries. According to State Duma deputy, member of the Budget and Tax Committee Igor Dines, the Ministry of Taxes receives applications for VAT refunds worth 33 billion rubles every month.
Of course, representatives of Russian business are not at all happy about the prospect of losing the opportunity to legally save on tax payments. In addition, tolling transactions are a common occurrence in the global economy. Most transnational vertically integrated companies actively use tolling schemes to minimize tax deductions, since the legislation of developed countries classifies them as exports of services that are not subject to VAT. Thus, opponents of the abolition of tolling emphasize, the current Russian legislation corresponds to global legislation.
Therefore, the harsh reaction of domestic aluminum workers to the initiatives of deputies is not accidental. After all, their enterprises will lose at least $200 million. It will not be easier for other industries. According to the deputy chairman of the Duma Committee on Budget and Taxes Oksana Dmitrieva, sewing enterprises in St. Petersburg are 40-75% loaded with customer-supplied raw materials. According to her, if external tolling benefits are deprived, production on them will be halved. As Ms. Dmitrieva says, in the textile industry, production using raw materials supplied by customers reaches 94%.
Another thing is that in Russia, especially in the mid-1990s, tolling was nothing more than a way to enrich the supplier. Payments for the processing of customer-supplied raw materials were enough for enterprises only to maintain current activities. In addition, complaints are made against the tolling regime, pointing out its lack of transparency, for example, in the lack of information about the scale of its use in the aluminum industry.
Nevertheless, according to Igor Dines, the abolition of benefits is now far from certain. According to him, initially the amendments that the committee is preparing to discuss had the status of “technical”. “There are all the “tails” that were discovered after the adoption of the Tax Code,” says Mr. Dines. - Therefore, it is impossible to reject them en masse just because of disagreement with the abolition of tolling. It's like stopping the subway." The way out of this situation, he believes, is to discuss this amendment as a separate bill. “It involves a significant change in the rules of the game for a number of industries,” continues Igor Dines. - For example, a year ago, when it was decided to gradually abandon the provision of tax benefits, the committee considered the possibility of abolishing tolling. But then industry representatives convinced us that it was too early to do this. If there is a desire to return to the discussion of this issue again, then I would like the voting on such an amendment to be preceded by a conscious discussion.” Igor PAVLOV |
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