After strengthening the ruble, the Ministry of Finance resumed financing of all public programs
It’s no secret that with the start of Russia’s special military operation in Ukraine, a record weakening of the ruble in 20 years took place: the rate fell from 77 to 120 rubles, which automatically resulted in the freezing of the Treasury. Tatarstan managed to resume funding not only primary expenditure but also other state programs in April-May only after the ruble strengthened, Tatarstan’s Finance Minister Radik Gayzatullin noted. At the same time, he urged the public not to wait for a budget surplus in 2022. Read in Realnoe Vremya’s report on the amount of money that was collected in the Treasury in the first quarter of 2022.
Tatarstan Treasury returns 400 million rubles to Sberbank
During a meeting of the Budget, Tax and Finance Committee of the State Council of Tatarstan on June 7, deputies calculated how the treasury had been replenished amid the imposition of unprecedented economic sanctions against the country . Two “financial” issues related to Tatarstan’s fiscal performance in 2021 and the first quarter of 2022 were officially on the agenda. This may seem like a boring bureaucratic procedure that does not generate much interest. But this year, the approval of the report cannot be considered a purely technical procedure, since the summary of the financial results for 2021 almost coincided with the start of the special military operation in Ukraine.
As the Minister of Finance of the republic Radik Gayzatullin explained to journalists, indicators of corporate income are traditionally announced in March, however, in 2022 they began to be reconsidered due to the difference in exchange rates . For example, following the correction of financial indicators, the Republican budget will have to return the excess income tax.
“Now it all comes down to income tax. It can be transferred now, while next month… We see at Sberbank, we have to return them more than 400 million according to annual reports. They submitted the annual report in March but transferred the tax rights last year. According to the legislation, we must return part of this money, ”explained the minister on the nuances of the adoption of the Republican budget of 2021.
The 2021 budget had a surplus of 11.6 billion rubles
However, during the meeting, the Chairman of the Budget Committee, Leonid Yakunin, tried to carefully avoid the subject of the start of the special military operation in Ukraine. He says that every year the budget faces different risks that need to be overcome on the fly.
“We have just learned to work with the pandemic, but Western sanctions have been imposed on us. We cannot relax,” he warned.
Reporting on Tatarstan’s budget performance for 2021, the Minister of Finance called it a surplus budget. According to his data, the budget received only 419 billion rubles, including federal money.
Its own tax revenue reached 366 billion rubles, which is 80 billion rubles more than in 2020. Non-refundable transfers totaled 75 billion rubles, including federal grants. In addition, 982 billion rubles of personal income tax were collected.
“The year was stable, our businesses performed well. There was the biggest income tax transfer in the last 6-7 years,” Gayzatullin said while congratulating Tatarstan companies for the tense operation.
Budget expenditure totaled 343.6 billion rubles, while the surplus is 11.6 billion rubles. According to the Minister of Finance of Tatarstan, the republic received 22 billion rubles to balance the republican budget thanks to the efforts of the President of Tatarstan Rustam Minnikhanov. The road sphere which received “a lot of money” for the first time also had an advantage. Despite the difficulties, all tax preferences remained, stressed Gayzatullin.
Exporters return to last year’s figures
At the same time, the head of the Ministry of Finance is concerned that the execution of the budget will not have a surplus this year. According to him, 173 billion rubles were collected in the budget in five months, which corresponds to the plan. But there was a risk of not perceiving it and was linked to the ups and downs of the exchange rate. The ruble’s record weakening over the past 20 years coincided with the start of the special military operation in Ukraine. The dollar fell from 77 to 120 rubles from February 22 to March 10. After that, the ruble started to strengthen again. Within a month, it was almost back to the level of the end of February. Due to the weakness of the ruble, large companies are constantly correcting forecasts.
“Tatneft and NKNK are flagship companies in the budget. As for NKNK. He has large loans in euros and dollars. In the event of an exchange rate, the difference will result in lower income tax. Since the rate has normalized, we are seeing large companies making an accurate forecast. This is close to what we were talking about last year. If we had more than 9 billion rubles taken into account for NKNK, we have now specified it at 7.8 billion rubles. Yes, it’s still lower. And if we looked at it in March-April, it would be much lower, almost zero when the rate was equal to 120 rubles,” Gayzatullin explained.
After the appreciation of the ruble, the Ministry of Finance resumed financing of all public programs.
“While only primary costs were funded in the first quarter, all programs have started to be fully funded since April and May. We can say that everything is going normally,” explained Gayzatullin.
Nevertheless, he urges the public to count on a surplus in 2022.
“I often ask what surplus we have? We don’t have it. There is quite a good performance that will allow us to meet all budgetary commitments,” he said.
There must be guaranteed preferences
One of the deputies Alexander Komissarov drew the attention of the Minister of Finance of Tatarstan to the extension of the term of tax preferences for those who work in a simplified tax system. People employed in processing industries, production and distribution of electric power, gas and water as well as construction benefit from a tax rate of 5% as a support measure for the real sector of the economy. For the rest of taxpayers using such a special tax regime, the tax rate is lowered from the federal level of 15% to 10%.
“Every year, we extend the validity period of the preferential rate by one year, by one year in fact. It is an uncertainty for a company. He feels more comfortable if there is a guarantee that the prime rate will be kept for several years. Perhaps it is necessary to make a preferential rate for several years for a newly created company in 2022? Komissarov asked.
The head of the Ministry of Finance has promised to return to this issue later this year.
“The President has decided to extend the validity of preferences since 2009. We have studied the experience of other regions. Many have canceled preferences in many sectors or reduced the list of users. We are not reducing the tax advantages”, he replied, proposing to his colleague to launch the initiative in the future.
Luiza Ignatieva. Photo: gossov.tatarstan.ru