The RSPP warned of the risk of companies defaulting due to Belousov’s plan • The Bell • RIMA

The RSPP warned of the risk of companies defaulting due to Belousov’s plan

A number of companies are at risk of default if the initiative of Vladimir Putin’s assistant Andrei Belousov to seize more than 500 billion rubles of excess income from businesses is implemented, said the Russian Union of Industrialists and Entrepreneurs (RSPP) Committee on Tax Policy, which includes representatives of companies in these industries.

Details

Quote: “The proposed initiative is distinguished by selectivity, insufficient elaboration and weak argumentation, and violates the basic principles of the tax system, as well as business activity,” the committee said in a statement.
The consequences of the withdrawal of excess income are a reduction in the investment and social programs of these companies, a general crisis of creditworthiness and solvency, which will lead to the default of “a number of companies,” the committee believes.
As a result, the competitiveness of Russian enterprises in the international market will decrease, the tax base will shrink and the GDP growth rate will decrease. As the committee emphasized, withdrawing money from the most efficient companies “takes away any incentive to improve the efficiency and productivity of enterprises.”
The committee meeting was also attended by representatives of the largest companies in other industries - Rosneft, Rostelecom, X5 Retail Group, LUKOIL and Inter RAO.

Context

The RSPP previously estimated the financial losses of business from the implementation of the idea at 4 trillion rubles,
(10% of the capitalization of the Russian stock market). Fitch noted that effective tax increases for 14 companies would impact their profitability, reduce available cash flows and capital investment, and force dividend cuts.
On Thursday it became known that at least four of the five relevant ministries, including the Ministry of Finance and the Ministry of Economic Development, gave negative opinions on Belousov’s initiative.
Belousov himself, as RBC found out , invited the heads of companies from whom he wants to seize windfall profits to a meeting on August 24. At the meeting, the presidential aide plans to explain his position, hear the companies' arguments and alternative proposals in order to “come to a compromise.”

Artem Gubenko