Page 88 - RusRPTJul24

765bn rubles.
Basic oil and gas budget revenues (this is the part that can be used for government spending) are still growing rapidly - in January-April 2024 they increased by 82% y/y. In contrast, additional oil and gas revenues are sent only to the National Welfare Fund, which means that at the end of this year only 1.05 trillion rubles will remain to replenish the fund. Most likely, the liquid part of the National Welfare Fund will continue to decline in 2024 (this is discussed in detail, for example, here), but this will not affect the budget and the ability of the Russian government to finance current expenses.
The budget deficit at 1.1% of GDP is small by generally accepted global standards. In 2023, this figure was 1.9% of GDP, in 2022 - 2.1%. These figures are below the pan-European highs set in 1992 at the creation of the European Union. According to the Maastricht Treaty, the budget deficit should not exceed 3% of GDP, and the size of the public debt should not exceed 60%. Russia is also doing well with the last parameter: at the end of last year, the total volume of external and internal loans was below 15% of GDP.
The Russian government continues to increase spending. There is no point in taking explanations about “carrying out Putin’s orders” too seriously: the budget deficit is growing due to the war. But this deficit is still small, and the state still has a lot of money for the war - and it is quite capable of finding new ones: the reform announced last week is far from exhausting the limit on tax increases.
6.1.2 Budget dynamics - specific issues...
VAT in simplified form in new reforms. Formally, it should become easier for small businesses: the income threshold for applying the simplified taxation system (STS) will be increased from 265.8 million to 450 million rubles, the threshold for the required residual value of fixed assets - from 150 million to 200 million rubles.
Increased rates of the simplified tax system for “large” small enterprises with incomes of more than 199.35 million rubles will be abolished. The rate in the simplified tax system will become uniform - 6% on the basis of “income” and 15% on the basis of “income minus expenses”. The increased rates are now 8% and 20%, respectively; you can read about the practical difference between the bases in small businesses here.
However, the “upper echelon” of micro-enterprises will come under a new tax blow: companies with a turnover of more than 60 million rubles a year will have to pay VAT. There will be two options: either on a general basis at a rate of 20% or 10% for some goods, but with tax deductions. Or without the right to
88 RUSSIA Country Report July 2024 www.intellinews.com