Crisis bailout plan will help us

The Government of the Russian Federation in response to complicated macro economic conditions has developed the crisis bailout plan, which was announced on the 28th January 2015. Sanctions, deterioration of the pricing environment on the commodity markets, devaluation of the ruble, accelerated inflation and the slowing of the GDP growth, push the Government to decrease expenses for business and population, provide sustainable economic development and social stability support.

According to the crisis bailout plan, the expenses on the majority items of the 2015 federal budget will be cut down by 10%. Within the following three years the State expenditure should be reduced at least by 5% per year in order to reach the budget balance by 2017. It is supposed that the reduction of the expenses will be provided first of all by the elimination of the inefficient costs. For example, expenses on the operation of the government authority will be cut.

According to the plan, the fulfillment of the social obligations is promised to be provided, that will require additional budget allocations. Besides, it is agreed not to reduce the costs on provision of defense capability, supporting of agriculture and fulfillment of international obligations. The realization of new investment projects will be put off and the released resources will be concentrated on the completing of the unfinished projects. 

In accordance with the plan, the State support programs in Russia will be extended on wider range of enterprises of small and medium business, than it is allowed by the current rules. This will happen due to the dual increase in the extreme value of the annual revenue from the sales of goods and services. The extreme value is a criterion for reference of the enterprise to the category of micro, small and medium enterprise. The increasing in the extreme value of annual revenue will allow to transfer about 8 000 enterprises to the category of small business; now they are formally considered as medium.  In particular, because of that more companies will be able to participate in the public procurement. 

Besides, as it is said in the government crisis bailout plan, the right to reduce rates for the taxation in the form of unified imputed income tax for a certain types of activity from 15% to 7,5% was acquired. Territorial entities of the Russian Federation will also be able to reduce the income tax from 6% to 1% for the enterprises, applying the simplified system of the taxation, and the right to reduce twofold the maximum amount of the potential annual income of the individual entrepreneur from 1 mln. RUB. to 500 000 RUB.

Bank guarantee will become not binding

The Government will soften requirements to suppliers and contractors on public contracts. These measures were listed into the bailout plan presented by the Government of the RF on the 28th of January 2015. 

Suggested easing is meant for the year 2015. As for government contracts, which should be completed till the end of the current year, customer and supplier have the right now to come to an agreement about the change of price, volume of work or amount of goods, as well as of the time of performance. Governmental customers will also get the right to postpone the payment of forfeitures, penalties and fines.

Key changes were undergone by the stance on a bank advance payment guarantee. As a reminder, according to the law on federal purchasing system a winner of the tender (auction) is obliged to stand security of a contract - to provide a bank guarantee or transfer caution money to a client. The amount of collateral varies from 10 up to 30% of contract value. In accordance with introduced changes the amount of collateral will be reduced to 10%.

Bank advance payment guarantees will become not binding. Thus it will be prescribed by the government regulation a number of cases, when a governmental customer has a right, but is not obliged to require security of a contract.

Since 2015 it is suggested to withdraw from bank advance payment guarantees on state contracts priced at more than 1 bln RUB, because advances on these contracts can be transferred only to accounts opened in the Federal Treasury.

Moreover, bank guarantees won’t be required for contracts, on which a customer retains a part of the sum by payment for executed works. In these cases the amount underpaid serves as security.

It was also suggested not to require collaterals, when a state contract means banking support, i.e. all settlements are carried out through special account in a bank, as well as for small contracts. However, concerning small contracts the price threshold is under discussion. Now therefore, it remains extremely small number of cases, when bank guarantees will be in use.

Bank guarantees became a problem for contractors as far back as in the previous year. So that, their price on building contracts increased from 1% up to 5% of contract value for the year, and now it can reach 11-12% at all. The experts suggested to withdraw from bank guarantees on small contracts long before, because many of them become unprofitable due to this, what is additional attack on small business.