On June, 2016 in our publication we have already discussed the topic of responsibility for accounting mistakes, that is directly associated with accuracy of statutory payments discharge to the budget and possible occurrence of arrears in payments

In this case it is worth mentioning that allowance of payments non-recoverable is regulated by the article 47.2 of the Budget Code of the RF. Non-paid within the established period payments can be considered as non-recoverable in the following cases:

• death or declaration of death of a payer – physical person;
• bankruptcy of a payer – individual entrepreneur – in part of debt because of property insufficiency of a debtor;
• liquidation of an organization – in part of debt because of property insufficiency of a company or disability to pay the debt by founders or participants of a company;
• court decision on expiration of the established period on debt collection including refuse from revival of an expired period of application to the court on debt collection;
• resolution on the termination of enforcement proceedings and on return of an implementing document to a plaintiff. Such rule works if it has been more than 5 years since the date of debt creation, also in cases when debt amount does not exceed requirements to a debtor. The same concerns cases of return of bankruptcy notices by the court or termination of bankruptcy proceedings because of insufficiency of money for compensation of legal expenses for carrying out this procedure.

Debts on administrative fines can be considered non-recoverable at the end of the established by the Government period of execution of a punishment by an administrative procedure (this regulation will come into force since January 1, 2017).

Decision on allowance of debt non-recoverable is taken by an administrator of revenue of the budget based on documents approving above mentioned circumstances.

By the order of the Federal Tax Service of Russia of 15.08.2016 №СА-7-8/438@ the procedure of making decisions on allowance of debt non-recoverable to the budget systems of the RF was approved. The order is registered in the Ministry of Justice of Russia on 19.10.2016 №44088.

By the order the list of documents is defined, that is reason to take a decision on allowance of debt non-recoverable. Also debt considering and preparation decision of Commission on receipt and retirement of assets, founded in a regional tax authority, procedures are established. Corresponding enactment on allowance of debt non-recoverable is approved by a head of tax authority and directed to a subdivision of tax authority – administrator of revenue of the budget.

For information

According to the data of the Federal Tax Service of Russia, debt on tax and fees, fines and tax sanctions to the budget system of the RF in nominal terms is growing since 2009 (Picture 1).

*-) data for 2011 are not presented in original source

Besides, lately the tendency of decrease in the debt growth is observed. (Picture 2).

*-) data for 2011 are not presented in original source

Debt to the federal budget takes the largest part (Picture 3).

In the industry section the largest part takes debt of processing industry enterprises (Picture 4).

Information agency Credinform prepared a ranking of the Russian micro finance and micro credit organizations in term of return on authorized capital.

We’ve already spoke about legislative changes in the financial market in our publication “Microcredits for business will increase”.

The Russian micro finance and micro credit organizations (Top-10) with the highest volume of revenue were selected for this ranking according to the data from the Statistical Register for the latest available period (for the year 2015). The enterprises were ranked by decrease in return on authorized capital (see table 1).

Return on authorized capital (%) indicates the efficiency of the authorized capital use and shows the amount of net profit accounting for one rouble of the authorized capital. The higher is the indicator, the more efficient is the usage of capital contributed to the authorized fund. However it is necessary to consider that too high indicators, exceeding in several times the average values for economy or sector may indicate low authorized capital at higher net profit.

For the most complete and objective view of the financial condition of the enterprise it is necessary to pay attention not only to the average rates in the industry, but also to the presented set of financial indicators and ratios of the company.

*) – indicator of return on authorized capital for MICROCREDIT COMPANY FUND OF ENTREPRENEURSHIP DEVELOPMENT OF VORONEZH REGION is not calculated due to the absence of authorized capital in accordance with the “Fund” legal form.

Average value of return on authorized capital for the Top-10 companies amounted to 3 700,38% in 2015. Average value without extreme values in Top-35 amounted to 9 596,22%.

Eight of ten companies in the Top got high solvency index Globas-i indicating their ability to timely and fully fulfill the debt liabilities.

LLC MICROFINANCE ORGANIZATION JOY MONEY and LLC MICROCREDIT COMPANY PLUTON 5 got satisfactory index due to the short time of activity.

Total revenue of the Top-10 companies for 2015 amounted to 1,6 bln RUB that is by 3% higher than in 2014. At the same time total net profit reduced by 56%. Four companies in the Top-10 (marked with red color in the Table 1) have reduction in net profit or loss in comparison with the previous period.

Increase in total revenue of Top-35 for the same period was 1% at decrease in total net profit by 53%.

Nine companies in Top-10 as well as for Top-35 have positive values of return on authorized capital.

Micro finance and micro credit organizations demonstrate super high values of this indicator, speaking about extremely high amounts of net profit to funds invested in the authorized capital. According to the experts, on the background of complicated economic situation, reduction in borrowings in banks by general public (Picture 2) and taking into account social significance of micro finance and micro credit organizations, the current situation may raise questions on perfection of legislative regulation of this activity.

Data for 10 months of 2016 are presented in comparison with the relevant period of 2015.

At the same time, total volume of borrowings and deposits to natural persons and other invested assets amounted to 10,6 tln RUB for 10 months of 2016.

For now this indicator exceeds fast growing volumes of micro crediting. According to the National bureau of credit histories, the volume of micro credits granted by 700 micro finance companies of Russia for IIIQ 2016 amounted to 109,8 bln RUB, 60,3 bln RUB of which were granted for consumer goods purchasing and 49,5 bln RUB as micro loans. For 9 months of 2016 the volume of micro credits increased by 23,2%.

As of October 1, 2016, 7,97 mln active loans were recorded. That is by 33,3% higher than in the second quarter of the current year. 45% in the structure of micro finance institutions’ portfolio account for micro loans, and 55% - for consumer goods credits. For the first time for three years overdue payment for micro credits have increased – from 21,2% to 21,9%; the average amount of these borrowings has decreased firstly for consumer goods from 21,1 th RUB to 18,3 th RUB. Currently about 10 mln people in Russia took micro credits.

There is no strongly marked concentration of micro finance and micro credit companies in the regions of Russia. However a few of them is observed in Moscow being the largest financial center of the country. According to the Information and analytical system Globas-i 35 of companies in the sector with the highest volume of revenue for 2015 are located in 15 regions of Russia (Picture 3).