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Deferment by installments
A temporary change in the VAT payment procedure should support the real sector of the economy
Anti-crisis measures are updated with new proposals every day. To ease the financial situation of enterprises affected by increased bank interest rates, the Ministry of Finance proposes to introduce a deferment of quarterly payments for value added tax for three months from October 1.As Deputy Prime Minister and Finance Minister Alexei Kudrin assured at a meeting of the government presidium on Monday, proposals to defer VAT payments will appear in the State Duma by the end of the evening. “We will convey our position to the deputies as quickly as possible,” said Alexei Kudrin. In turn, Mr. Putin noted that “the VAT payment system will be soft and calm.” “This measure is significant, but it is not revolutionary in nature,” said the Prime Minister.
As the events of the last month have shown, the government will not adopt any revolutionary changes to VAT in the near future. Plans to reduce VAT have been sacrificed to the liquidity crisis. But even before the crisis, it was clear that the idea of reducing the value added tax was becoming less and less relevant, inferior in importance to the problem of the Unified Social Tax, fees for which directly affect the state’s fulfillment of social obligations to the population.
The point of the current proposal to defer the payment of VAT, according to experts, is to support liquidity by temporarily leaving some reserve of money with taxpayers. Organizations will be given the opportunity to use this money not for taxes, but for other needs. The logic of this decision is as follows: since the state gives money to banks, then the sphere of real production must also be supported by allowing temporarily not to pay the tax in full.
“Technically, apparently, we are talking about providing taxpayers with the opportunity to transfer VAT for the third quarter not before October 20, but three months later, that is, until January 20. However, it is unclear what will happen to the tax for the fourth quarter. Will it also be deferred or will VAT for the third and fourth quarters have to be paid on January 20 at the same time?” - Alexey Smirnov, the leading expert of the Consultant Plus company, is perplexed. “In this context, it can be assumed that in order to make the imposition of tax payment issues minimal, the Ministry of Finance will rather provide the opportunity not for deferment, but for installment plans. If an installment plan is provided, it will imply dividing into parts the amount that must be paid before October 20. If the installment plan is for three months, then it turns out that you will need to pay 1/3 every month. Consequently, with this option, VAT will be paid as follows: 1/3 in November, 1/3 in December and 1/3 in January,” says Mr. Smirnov.
As a source in the Ministry of Finance later explained, we are really talking about introducing an installment plan for paying VAT for 3 months. According to a ministry official, it is planned to allow payment of VAT in equal installments once a month. However, he noted that the bill is still being prepared, so the exact payment mechanism has not been finalized.