The Ministry of Finance of the Russian Federation and the Federal Tax Service of the Russian Federation presented new approaches to the evaluation of tax preferences, along with the analytical system under development ‘Benefits Effectiveness’ at the session ‘Effectiveness of preferential tax regimes: main directions’, which was part of the Moscow Financial Forum 2021.
The event was attended by State Secretary - Deputy Minister of Finance Alexey Sazanov, Deputy Minister of Energy Pavel Sorokin, Deputy Minister of Economic Development Sergey Galkin, First Deputy Minister for the Development of the Russian Far East and the Arctic Hajimagomed Guseinov, Deputy Head of the Federal Tax Service Vitaly Kolesnikov, Head of the Department for Analysis of the Preferential Tax Regimes Performance of the Ministry of Finance Denis Borisov and Vice President for Government Relations at Polyus PJSC Sergey Zhuravlev.
State Secretary - Deputy Minister of Finance of the Russian Federation Alexey Sazanov explained that the creation of a new system for benefits effectiveness evaluation is primarily due to the need to systematize data on existing tax treatments. The system will be useful, among other things, for evaluating tax preference initiatives. He stressed that the analysis will be conducted in a sectoral context: ‘The main idea is to look at those sectors of the economy, for which benefits work, and for which they do not. We are still carrying out sectoral analysis, after all. This is not only about the analysis of the total number of taxpayers who apply a particular preferential treatment, but also about the understanding of which sectors of the economy are applying this treatment. Maybe there is a need to adjust the treatment for some sectors,’ Alexey Sazanov said.
According to the Head of the Department for Analysis of the Preferential Tax Regimes Performance of the Ministry of Finance of the Russian Federation Denis Borisov, when setting a goal to evaluate the effectiveness of tax treatments, the Ministry decided to move towards it through the analysis of efficiency at the taxpayer level and the compilation of data.
‘We have proposed a system that would indicate the presence or absence of excess profitability for certain taxpayers who use benefits or preferential tax treatments. Since the array of data is immense, we needed the help from the Federal Tax Service. At the moment, we are actually at the stage of developing an automated system, which will make it possible to conduct such an analysis, and we will assess the effectiveness of the treatment as a whole on this basis,’ Borisov explained.
Deputy Head of the Federal Tax Service Vitaly Kolesnikov said that the databases available to the service were integrated to the system for tax treatments evaluation under development.
‘We will commission it in January next year; it is actually in the pilot mode right now. We can already see that we have quite a good mechanism, which allows us to evaluate the effectiveness of benefits and to find this tricky and perhaps illusory line, where we should stop with these benefits so as, on the one hand, not to slip into excess profits and excess returns of enterprises, and on the other hand, to assist exactly so that the company developed in the direction that is of interest to the government,’ Kolesnikov explained.