Business cannot seal deals in Crimea, the resort season is on the brink of disruption, and it is difficult to pay taxes
Russian governors and businessman are going to annexed Crimea, however real deals do not happen. The rest season may be disrupted because of bad logistics. It is difficult to pay taxes, as there are not enough banks, and re-registration using Russian rules is yet to come. These are the complains that the Crimea businessmen have directed to Business Russia.
The head of the Crimean regional department of Business Russia Alexey Grintsevich sent a letter to the central apparatus of the organisation with a list of problems that Crimean businessmen have been facing since the annex of the republic by Russia. The letter was written based on a survey of approximately a thousand businessmen who participated in Business Russia’s seminar in Simferopol on May 19th of the current year, said Grintsevich.
Regardless of the fact that after the annex of Crimea by Russia, the republic was visited by numerous delegations of Russian governors and businessmen, these visits did not stem and deals regarding cooperation in the tourism sphere, the Crimean businessmen lament. “Real purchases of travel vouchers using budget funds and state-owned businesses are absent, only direct private sales, which are unable to give the [needed] volume,” they say.
What is more, there is a threat of disruption of the resort season because of transportation problems: there is insufficient aviation transport, and the admission capabilities of the Kerch ferry is still low. The prices on goods are also growing because of logistics. “As a result, retail chains prefer to realise the remaining and illegally imported Ukrainian produce – familiar to the consumer and more accessible,” says the letter.
The businessmen are asking to extend the moratorium on fining for the untimely tax payments (starting March 20th, 2014 until June 1st, 2014). Because of the small amount of bank offices, there are difficulties with opening accounts and timely operations. For example, budget payments take about five days, this results in the lack of opportunity to pay taxes on time, writes Grintsevich. The VAT is a whole another story: on continental Russia it is 18%, in Crimea – 4%, therefore Crimean companies that have bought Russian goods cannot count on compensation.
Also the business owners are predicting difficulties with the re-registration of companies in the Russian tax system. The beginning of the re-registration was announced as July 1st, it will be done in Simferopol only, which will inevitably lead to huge lines and will become a serious problem for the citizens of faraway districts. It is necessary to open departments for re-registration in all Crimean cities, calls Gritsenko. He said that the letter was sent about two weeks ago and only one problem has been solved in this time – regarding the VAT. The state council of Crimea issued the order according to which Crimean businessmen, when working with Russian suppliers, will use a rate of 18% and, accordingly, can count on compensation.
Work is underway regarding other issues, reported the chairman of Business Russia Andrey Nazarov: “The efficiency of these trips [of the governors and businessmen to Crimea] cannot be 100%. We hope that within half a year the agreements will yield results.”
Nazarov proposes to support the tourism industry through the expansion of social tourism programs. According to him, the representatives of the Ministry of Crimean Development were given proposals, including those in financing of socially unprotected citizens from the federal budget: pensioners, invalids and low-income families. Calculations of the program are underway, said Nazarov.
Translated by Mariya Shcherbinina
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