The share of “gray” sector of small and medium business is back to 40-50% - according to the Head of the SME Bank

11th of October 2013

Two years ago, “according to OPORA RUSSIA, a maximum number of entrepreneurs left the “gray” area, up to 75% of entrepreneurs worked legally, said Sergey KRYUKOV in an interview to ITAR-TASS

The share of small and medium-sized businesses operating under “gray
schemes”, has almost doubled over the past 2 years – up to 40-50%, reports ITAR-TASS
as quoted by the chairman of the Russian Bank for Small and Medium Enterprises
(SME Bank) Sergey KRYUKOV. In an interview to the news agency, the Head of the
SME Bank said: “According to OPORA RUSSIA (All-Russian Non-Governmental
Organization for Small and Medium Business), 2 years ago a maximum number of
entrepreneurs left the “gray” area, up to 75% of entrepreneurs worked legally”.

However, to date, about half a million businesses closed down, many of them
“went into the shadows”. Due to increased rate of insurance payments to social
funds for individual entrepreneurs (IE), now it amounts to 36 thousand rubles a
year instead of 17 thousand. For some categories of small businesses a reduced
rate of insurance premiums in the amount of 20% is applied.

“I think the situation has
deteriorated significantly, the proportion of “gray” sector has returned to
40-50%", - said Sergey KRYUKOV.

According to Sergey KRYUKOV, lack of consistent policy by the state
facilitated making this decision. “Unfortunately, between 2010 and 2013 small
and medium business has been forgotten for some reason. Now the state started
thinking about it again when it suddenly discovered that nothing new is being built,
no jobs are created, no production, no income tax revenue”.

At the moment, a number of decisions to improve the situation in the field
of entrepreneurship in Russia are adopted at the level of the federal
government. In July 2013, the President of the Russian Federation signed a law
reducing the amount of insurance premiums for individual entrepreneurs with an
annual income less than 300 thousand rubles (fixed annual insurance payment
will be 19,425 rubles). The law comes into force since January 1, 2014.

In October the Government considered a number of additional measures to
support small and medium business in the country.

During the autumn session the MPs will also consider the draft law on preservation
of preferential rates of insurance payments at the level of 20% for certain
categories of small and medium-sized businesses.