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Vremya Novostei, June 6, 2002

Don't expect any radical changes

Interview with Sergei Ivanenko by Viktor Khamrayev

"Small business involves hard labour, rather than business." At least that is how Deputy Head of the Yabloko faction in the State Duma Sergei Ivanenko sees it.

We can conduct protracted discussions on how to define an enterprise a small business: with an annual turnover of RUR 10-15 million (according to the government's definition) or with a turnover of RUR 30-45 million as proposed by Yabloko. We can also debate the profits tax rate that small businesses should pay - 8%, 6% or 4%. However, it doesn't matter who wins this debate, as it won't lead to any radical changes in small businesses, as all the disputes occur on a government plane, which is a fiscal area. Small business is treated just like any other business i.e., an activity aimed at making a profit.

In reality it is not a business, it is simply a form of work. We are accustomed to thinking that only employees work. Every day they go to the plant, company or bank, and the owner pays them wages every month. A small-time entrepreneur works in the same way. He differs in only one respect from an employee: he "goes to work" at a place which he himself created and does not have any owner. Therefore he should be subject to the same fiscal requirements as employees who pay only personal income tax.

Such an approach would radically change the situation in small businesses. Under the current fiscal approach our country will never have a "Bill Gates" of its own, and all the "kulibin'" inventions will once again be of no interest to anyone. Consequently the Yabloko and Union of Right-Wing Forces (SPS) factions decided to develop a number of draft laws on small business as a labour activity.

We will finalise these draft laws by September-October and submit them to the Duma, irrespective of the outcome of the present tax dispute. We hope to persuade the government by autumn of the correctness of this approach, so that our package of draft laws is not transformed turn into a simple promotion for Yabloko and SPS, but actually becomes law.

See also: Development of small-scale business

Vremya Novostei, June 6, 2002

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