Page 68 - RusRPTJul20

them would even be raised. For instance, an upgrade plan for mainline transport infrastructure should be increased by 13bn rubles in the next two years, the daily said. A national project for support of small businesses would be cut by 7bn rubles following adjustment of plans for easy-term lending. A Finance Ministry spokesperson said that the amendments are not final and spending may be revised again if the macroeconomic factors change.
A staggering 21% of Russia’s federal budget expenditures will go toward the Pension Fund next year​. To offset declining contributions to the Fund due to the coronacrisis, the budget will increase its funding by nearly RUB1 trillion ($14.4bn) in 2021, BMB reports.
Slashing social security contributions has been a key element of the government’s COVID anti-crisis response. Contributions for SMEs were permanently cut from 30% to 15%, costing the Pension Fund RUB350bn ($5bn) this year and roughly RUB387bn ($5.6bn) next year.
Small businesses and sole proprietors were exempt from paying social security taxes in the second quarter. And most recently, Putin announced that tech social security taxes will drop from 14% to 7.6%.
The other factor affecting the Fund’s earnings is the cumulative reduction in wages being paid due to COVID. As employers pay fewer wages, the total value of their social security contributions also declines. Due to just this factor, the Pension Fund will receive RUB1.3 trillion ($18.8bn) less than planned this year.
The ultimate effect of these changes is that the Pension Fund’s dependence on the federal budget will continue to grow. Next year, 42.6% of the Fund’s total revenue will come from the federal budget, up from 36% this year. This reverses the progress of previous years, which saw the share of federal funding drop from a high of 45% in 2017.
The national plan of Russian economy restoration outlines new measures of support to the tune of RUB430bn ($6.2bn), ​including RUB133bn ($1.9bn) in 2020 and RUB300bn ($4.4bn) in 2021, Head of the Russian Accounts Chamber Alexei Kudrin said in an interview with ​TASS​. According to the government, the national plan is worth RUB5 trillion ($72.5bn), including measures declared in three packages. In 2020 some RUB2.8 trillion ($40.6bn) will be earmarked, including RUB133bn ($1.9bn) on events, which were not included in previous packages and RUB2.4 trillion ($34.8bn) for 2021, including nearly RUB300bn ($4.4bn) on new measures,” Kudrin said. The national plan adds RUB430bn of support for two years, he said. “I believe that [this plan] should outline stronger changes in economy because 2021 should be used for changing the federal budget’s structure, significant support for small and medium-sized businesses and reducing regulatory burden on enterprises.”
Starting from 1 June, a new special lending programme is to be available to support employment in vulnerable industries. ​The rate of the loan is set at 2%, with an 85% public guarantee attached. If, at loan maturity, the borrower has kept employment at or above 90% of a defined level, then the loan amount and the accumulated interest will be fully cancelled. If employment has been kept between 80% and 90%, then the government will pay half of the loan amount and the accumulated interest. The president
68​ RUSSIA Country Report​ July 2020 ​ ​www.intellinews.com