Page 17 - RUSRptSept18

In July, the government rejected a draft law on SPIKs after Deputy PM Dmitry Kozak and Economy Minister Maxim Oreshkin voiced objections. However, Belousov’s recent proposal to collect more than RUB500bn ($7.3bn) in corporate taxes to implement Putin’s May decrees has revamped discussions about the need to introduce broader support measures for private investors in the Russian economy. The 14 targeted businesses and MinFin strongly opposed Belousov’s proposal and are now seeking other methods to achieve Putin’s goal of boosting investment to 25% GDP by 2024. The interested parties met Monday evening to discuss adapting SPIK 2.0.
As in the previous concept, business would be able to sign a special investment contract in practically any sphere other than tobacco, alcohol, and fuel production. The investment projects must be fully private, excluding concession agreements and public-private partnerships from eligibility. Private investors will be obliged to realize the projects in a specified time period (up to six years for projects under 30bn, and up to 12 years for more expensive endeavors), while the state will provide guarantees of tax and regulatory stability, as well as other non-descript incentives.
MinFin hopes the investment benefits will help realize RUB23 trillion ($338bn) worth of projects by 2024.
2.9 World Cup brings no relief for Watcom Shopping Index
The World Cup brought little relief to the Watcom Shopping Index, as the index continues to under perform all three of the previous years in July.
Shopping Index dropped by 4% average compared to May -- down by 5.2% in the first week of the month and 5.97% in the second month.
That was despite careful preparation by the leading shopping malls in Moscow to cater to the hoards of costumed revellers that descended on the Russian capital from all over the world.
However, the World Cup did boost sales but it seems to have been concentrated in very specific and rather predictable product groups.
Sales of beer, snacks and food consumption as well as sales in related retail sectors all grew, according to Watcom’s specialists. Overall, consumption grew by more than RUB5mn during summer in retail including payment services, Internet, mobile communications, and tourism but the good cheer failed to spill over into the top shopping malls.
Vegas Crocus City International Press center was opened and saw increased traffic. Afimall also organized a fan zone with live broadcasts of matches, a playground and for kids and other entertainment. But this didn't translate into higher sales.
As the chart shows the leading malls all saw traffic down on previous years as revelers stayed in the streets around Red Square, according to Watcom Group CEO Roman Skorokhodov.
The poor results are partly related to a structural change in Russian retail where more shopping is shifting online and customers prefer to use their mouse to buy staples and commoditised items like clothes and tickets online than trek down to the mall.
Incomes have been rising all year and consumer credit has also taken off and reached a point where the Central Bank of Russia (CBR) is thinking about intervening to slow the growth.
17 RUSSIA Country Report September 2018 www.intellinews.com