What are the small and medium enterprises waiting from the State?

The operating efficiency of the small and medium enterprises (SMEs) is one of the main indicators of the State’s competitiveness. According to the experts, in France the share of SMEs by GDP cover is 62%, in Italy - 60%, Japan – 55%, Germany – 54%, Great Britain - 53%. The share of SMEs by GDP cover in Russia is about 20%. SMEs play important role in the market conditions, but can they unlock the potential and become the reason of rise and development of the Russian economy?

Legislation establishes the criteria of enterprises’ affiliation to the SMEs. The Federal Law № 209-FZ of July 24, 2007 «On the development of small and medium enterprises in the Russian Federation» (as amended on 29.12.2015) defines the average number of workers for small and medium enterprises. Meanwhile the order of the Government of the Russian Federation # 702 of 13 July 2015 set the maximum sales revenue for each category. The number of enterprises by categories and separation criteria are represented in Table 1.

Taking into account the criteria above, according to the Information and analytical system Globas-i, currently there are more than 1,87 mln of SMEs in Russia; that is 37,5% of total active legal entities (4,99 mln legal entities). The comparison of SMEs number and the result of their activity demonstrate the minor contribution of SMEs to the country’s economy.  For incorporation and development of SMEs, as well as investors, it is necessary to create the conditions.

What are the small and medium enterprises waiting from the State today? Some interesting suggestions were made on the forum «Small business – the national idea», the Presidium of business association «Support of Russia», VII Conference of the Chamber of Commerce and Industry of the Russian Federation; the events were held in the first quarter of 2016 and dedicated to small and medium enterprises. Among noteworthy proposals are:

• the use of VAT credit in the simplified procedure for enterprises, exporting non-oil and gas products;
• leave the number of reporting forms at current level, simplification of HR record management in micro-enterprises;
• depositing the amount of security by the winner of the contract in dependence on proposed price in the competition (now on price of the contract);
• deliverance of respectable companies from banking collateral;
• increase of maximum revenue amount from 60 mln to 120 mln  RUB for using of simplified taxation system;
• extension of small business participation in procurement of state-owned companies up to 15% of annual procurement volume by direct contracts;
• mitigation of the requirements for execution of contracts, the transition to life cycle contracts in procurement of state-owned companies (the cycle includes procurement, future maintenance, and disposal);
• establishment of the uniform rules for taxation and others.

By the end of the events, the Administration of the President of the Russian Federation released a list of orders, which satisfied the representatives of SMEs. It is expected, that in April the Government of the Russian Federation will consider the number of bills, which let to facilitate business activities. However not all requests of SMEs will be satisfied.  For example, the Ministry of Finance of the Russian Federation imposes the restrictions on use of some tax benefits.

In particular, the abolition of unified tax on imputed income is transferred on 1 January 2021. It is also suggested to decrease the amount of expenditure tax instead of tax rebate for online buying of cash register equipment, if SMEs were not required to use the cash registers earlier; there are also other restrictions. However, one thing is obvious – the facilitation of small and medium business activities will contribute its revival, the growth of economic entities, their income and, accordingly, income of the State.