Legal economy. "Grey activity" is total insecurity"
How to legalize activities to self-employed citizens – this was discussed today at a briefing in the House of Entrepreneur. Rustem Sibgatullin, First Deputy Minister of Economy of Tatarstan, answered the journalists' questions. "Exit from the shadow" will create healthy competition, attract young people to the business environment, ensure GDP growth and increase citizens' legal awareness, Sibgatullin noted. According to him, in recent years special attention has been paid to work on motivating self-employed citizens to legalize their activities. So, the Civil and Tax Codes have been amended to allow citizens to conduct certain types of entrepreneurial activities (1. on tutoring, 2. cleaning of living quarters, housekeeping, and 3. babysitting, taking care for patients, other persons in need of constant external care) without registration as an Individual Entrepreneur.
The status of the self-employed does not provide for any specific features of taxation after the expiration of the period for which "tax holidays" are granted. Moreover, the status itself after 2018 has no value, since for the continuation of legal activity the self-employed will need to acquire the status of Individual Entrepreneur. This circumstance substantially devalues the advantages of the status of the self-employed and reduces the stimulating effect.
According to a survey conducted by the Committee of the Republic of Tatarstan on socio-economic monitoring, the number of people employed in the "informal" labor market of the Republic of Tatarstan increased by 1.8% compared to the data of the May 2017 survey and amounted to 416 thousand people in May 2018, or 17.7% (estimated) of the labor force of the Republic of Tatarstan. As of July 01, 2018 in the register of subjects of SMEs of the Russian Federal Tax Service 163,442 subjects of SMEs of the Republic of Tatarstan were registered.
"Due to various reasons, many self-employed people are not ready to take on all the requirements and obligations of the IP (Individual Entrepreneur) or OOO (Limited Liability Company)," Rustem Sibgatullin said. "They want to go to the legal field, because they understand that "grey activity" means their completely insecurity. This is a big risk not only of possible problems with inspection bodies, but also the lack of social guarantees, state support". He added that currently a new tax regime for taxing professional income of self-employed citizens the so-called tax on professional income is on the development stage. The goal is to legalize the activities of self-employed citizens by removing existing barriers and creating economic bases for motivating work within the right field.