Opening remarks by Mikhail Mishustin:
Good afternoon, colleagues,
The government is about to complete the draft budget for the next three years. Today, we will review a package of draft laws that are related to drawing up the budget.
The work on the draft budget was carried out amid serious financial challenges. The epidemiological risks aggravated the sanctions imposed on our country and low oil prices. Eventually, we managed to walk along a very thin line where we had to simultaneously address the critical tasks of unconditional compliance with the social obligations of the state and to ensure economic growth.
The measures that we took during the coronavirus pandemic and the economic crisis were effective. Now, we must move forward and address new problems. The unconditional compliance with the social obligations of the state to the population remains at the top of our list of priorities. This is what the President is telling us. In the draft budget and the documents that the Government will review today there is financial support for the presidential instructions. They are aimed at resolving problems in the basic sectors of the economy and the life of our country.
The principal ideas of the country's main financial document were formulated by the President. They include people’s quality of life and the country’s economic competitiveness. We cannot separate quality of life, social obligations and living standards from the country and the economy’s capabilities in a competitive world. We addressed these tasks when the ministries and departments were working on the draft budget.
Today, we are reviewing draft laws on the budgets of extra-budgetary funds. They are the solution to the major social issues. Funds have been set aside for the payment and adjustment of the maternity capital and for providing technical means to people with disabilities. We will keep the compulsory insurance premium rebate intact for sole proprietors and companies employing people with disabilities. Free medical care, including high-tech treatment, will continue to be provided. Funds are being set aside for primary care. Subventions will be made available to the regional compulsory health insurance funds to pay for medical help under the basic programme. Today, we can say that the economic stability that we have managed to achieve guarantees the fulfilment of all social obligations.
Colleagues, it is important to remember that a state budget
is a financial document. Yet, this document is not about figures – it is about
people. It is a document aimed at addressing specific problems that people in
our country are facing.
This is why a package of tax laws has been drafted to ensure the necessary revenue level. Some major companies say we are only taking money from oil companies. This is simply not true. We believe that when there’s a difficult situation, everyone should pull their weight when it comes to dealing with the problems facing the country and the people. This is our deliberate policy. Hence our vision of tax policy. Here are just a few of our proposals.
We propose slightly increasing taxes in a number of high-yield industries. This is why we have modified the excess profit tax plan in the oil and gas industry. We propose revising the criteria for a number of tax benefits in the oil and gas sector, increasing the subsoil use tax, and indexing the excise taxes on tobacco products to above inflation.
Additional revenues should also be ensured by revisions of double taxation agreements with a number of countries. Such agreements have already been signed with Cyprus and Malta. We will continue working on this track.
The bill on personal income tax is highly important. The President has proposed imposing a 15 percent income tax for incomes exceeding 5 million roubles a year. This bill is also at the moment being considered by the Government, and it is part of the package of budget-forming laws. Why is it vital? Because the President has clearly said that all the revenues received through this increase will be directed towards the treatment of children with serious rare diseases.
It is very important that every task our country is facing is backed by financial support and a source of the funds required. This is the idea behind those bills that we are submitting to the State Duma.
The parliament will certainly evaluate our work when these bills are reviewed there. But it is more important that the result of our work will be evaluated by people – based on how their concerns will be resolved through the new legislation. Therefore, today, given the financial constraints that we are in, we must think not only about allocating money for certain purposes, but also about spending that money efficiently. Our work on the budget has actually resulted in unearthing new reserves: some of the previously allocated amounts have been spent inefficiently or not even spent at all, and are now dead weight on the budget accounts. While struggling with this crisis, we have successfully redirected those amounts to address issues that are critical for many people.
Today, while putting together the next three-year plan, we have a most important task of preventing federal funds from being spent inefficiently, which means we need additional flexibility, and additional opportunities for the Government to respond to the challenges that will arise during budget execution.
As per the President’s instructions, the Government and the parliament were granted these necessary powers in 2020. We are about to consider amendments to the budget legislation that would allow for moving this mechanism, which has proven its efficiency, to the next year. This will not be done to the detriment of a thorough review of bills or parliamentary oversight. It will give us an opportunity to develop a new efficient budgeting mechanism that will help us to actually fulfil the objectives for which we allocate funds from the budget.
Today we are finishing the most important stage of the budgeting process – namely, developing a draft budget. But I would like to draw everybody’s attention to the fact that the work is not over yet. It is the beginning. It is not the last stage of the budgeting process. It is the first stage. Now we are to defend the outcome of this work in front of the parliament. It is important to us that all our proposals are discussed in full. We could pass any tax or budgeting laws. But if they are not clear to the target categories of the public, they will never be fully implemented.
Colleagues, it is your personal responsibility and duty to go to the State Duma and present each government programme in person. We must explain what every single rouble is going towards and show what is behind each figure in the budgeting bill we are submitting to the parliament. Also, what results we expect and when. Most importantly, how the bill will be beneficial to the people and the country.
There is one more important matter. Today, we will simplify the procedures for issuing regular private visas and regulating the stay of close relatives of our citizens – spouses, parents, children, brothers, sisters, grandparents and grandchildren with a different citizenship – on Russian territory. For this purpose we will introduce a number of amendments to the Federal Law on the Procedure for Exit from the Russian Federation and Entry into the Russian Federation. These relatives will be able to apply for long-term private visas for up to one year. Our citizens will only have to fill in a simple application.
In addition, the legal norm which required our guests to leave Russia every three months in order to retain the right to receive a visa will be abolished. This will create more comfortable conditions for the families that are still divided by borders and make life easier for those who would like to remain in Russia. They will have more time to obtain a permit for temporary or permanent residence.
Let’s start our discussion.
I suggest starting our work with a review of the forecast for national socioeconomic development. The Ministry of Economic Development prepared two versions – basic and conservative ones. The main point is that it allows us to see the required margin of safety of our economy. It suggests that already by the end of next year the Russian economy will get on the track of steady growth and will grow subsequently at no less than 3 percent a year. Importantly, next year we will be able to restore incomes of our people and their employment. This means we will restore the purchasing power which is extremely important both for people and the economy in general. These are the tasks that the President has set before us.