The unified tax for the small business: fact or fiction?

On the recent press conference Mikhail Orlov, the chairman of the board of the State Duma Committee on Budget and Taxes, has stated that within the simplification of the small business tax administration policy, the State Duma drafts a bill that is going to introduce the one stop-shop principle for fiscal charges.

The core of the initiative comes down to the fact that all the liabilities of the taxpayer to the state will be united into one payment, which entrepreneur will pay once a year or at other intervals.

Besides, one more important aspect of the reform is being studied. The board of Treasury, not the company itself, is going to distribute the unified payment into different level budgets and into non-budgetary funds. At the moment it is making incursions upon company’s labor hours.

The governmental authorities more often began to speak about the support of the small business, after it became clear than the country’s economy has sunk into stagnation under well external business climate on export goods. Its share in the Russia’s GDP is still low enough, especially in comparison with developed countries. The increase of required insurance payments resulted in the fact that more than 500 thousand small firms were closed down in a short time. Such controversial steps led to boomerang effect – the total tax base has decreased. The offered bill should to some extent compensate the loss.

The unified tax principle is instinctively clear and can be easily implemented in practice both for the payer and for fiscal authorities. The question “what kind of total load will it be for the entrepreneur?” remains undetermined. In fact, it is hard to understand the real effective rate of all the payments, when there are a lot of taxes and the payments are delivered at different times. On the other hand, the high interest amount of the general tax may exert negative psychological effect on the people, starting their business for the first time.