Page 66 - RusRPTNov19

only 0.2% y/y). However, many construction companies report to the State Statistics Service only at the end of the year, so construction activity may have already started accelerating, though this would only show up in the year-end statistics. The growing output of construction materials (such cement and concrete) might mean this is the case.
Government expenditures reached RUB12 trillion in 9m19. With spending of RUB18.3 trillion pencilled in for the full year, faster spending growth is likely in 4Q19 - at 16.9% y/y according to the budget. This will likely support investment activity.
The surplus came in at RUB1.3 trillion in 3Q19 and RUB3 trillion in 9m19.
Assuming that 4Q19 expenditures are higher, a deficit will emerge in 4Q19. Bankers expect the surplus for the full year at RUB2 trillion, or 1.9% of GDP.
6.1.2 Budget dynamics - specific issues...
Russian billionaires are lobbying against far-reaching tax reform plans.
The government has announced plans to change tax residency rules to force businessmen living abroad to pay tax in Russia. Both Russians who earn money abroad and expats living in Russia might have problems as a result of this proposal. But, never fear, a group of Russian oligarchs may yet succeed in changing the government’s mind. At the moment, in order to be deemed a Russian tax resident, you have to spend over 183 days per year in the country. The Finance Ministry has proposed cutting this in half, to 90 days, as well as mandating that those who spend less than 90 days in Russia but still have their “center of vital interests” in the country, also pay tax. Tax resident status in Russia requires a person to pay (Rus) income tax on global income and report all foreign-held bank accounts.
66 RUSSIA Country Report November 2019 www.intellinews.o