Labor productivity in Russian companies can lead to a new level, if you stimulate it with subsidies and incentives. This recipe is suggested that the business Association “Support of Russia”: its programme (have) it will send to President Vladimir Putin, said the head of the organization Alexander Kalinin.
Participating enterprises, the government is actually exempt from taxes for three years, the document says. The total amount of subsidies on improved productivity of Support is estimated at 25 trillion, equivalent to almost 30% of last year’s GDP. And this “minimum”, we are talking about the period from 2017 to 2020, said the Chairman of the Committee “Support” the efficient production and higher labor productivity Dmitry pishalnikov.
Potential output growth in Russia — 200-300%, according to the organization, and the company that will be able to do it, “significantly reduce its costs, increase competitiveness and profitability”. While productivity increases fourfold at the same time grow GDP, and then and tax revenues, are confident the authors of the program. “There will be money to raise salaries for teachers, doctors, social workers and, of course, to raise pensions to the level of developed countries” claim they are.
Who will qualify for subsidies
The subject of labor, said the program should be made in the financial statements. The company should be divided into two groups: the first will include those whose productivity is growing while the number of employees or increase their number, and the second — company, having the opportunity to participate in the program in terms of revenue, but not included in it because of stagnating or falling productivity.
How to calculate performance
The calculation of labor productivity, according to the plans of “OPORA Russia”, you need to as the ratio of the magnitude of value added, adjusted for inflation, to the average payroll number of personnel. Value added is estimated as the accrued VAT payable to the budget reduced by the amount of unpaid VAT vendors are exempt from tax or applies a preferential rate, and increased by the amount of VAT paid on purchase of fixed assets. Take into account should be zero VAT rate when exporting. Because of this, the first phase of the program, do not get into it companies with a simplified accounting system.
Access to it implies the minimum needed revenue, “Support of Russia” in e.g. the lower bound in the amount of 200 million RUB with VAT (for the holdings of 300 million rubles.). The average salary in the enterprise should not be lower than the average for the region must be a property restriction: “the Company must have a separate production building (own or rented; fenced with separate entrance, entrance, or when on site and near other enterprises)”. The program should include all enterprises with state participation.
With the growth of productivity of companies from the first group by 1% “Support” offers to charge them a state subsidy of 1% of the amount of each tax. However, the grant should not overlap the amount by which the company increased tax payments over the past year to the previous year. The subsidy is paid annually in the amount of up to a quarter of the amount each paid taxes for the past year (VAT, income tax, insurance premiums, property tax). Be provided the grant will be for the year, the deadline for payment until 1 April next year. The tax on dividends in every year of the subsidy is set at 9% (currently for Russian companies, the rate is 13%). Businesses will also be eligible for help to pay loans for the purchase of equipment. The amount of such aid shall not exceed 20% of the amount of accrued subsidies.
An important factor
If in the period 2003-2009, the labor productivity in Russia grew on average by 3.7% in 2009-2015 is only 1%, OECD data show. The growth of labor productivity is in the focus of large-scale economic programs that prepare the Ministry of economic development and the Center for strategic research (CSR) Alexei Kudrin. Total factor productivity (takes into account labour, capital, technological progress, infrastructure, quality of market and regulatory institutions) can provide from 0.7 to 1 percentage point in GDP growth by 2025, Kudrin said. After a few years the performance, in his opinion, should be the main driver of economic growth.
“Support of Russia” expects that its program is integrated into priority government project on labour productivity, explains Kalinin . Now, according to “OPORA”, in industry it is used productively only 40% of the time 20% is spent on inefficient use of labor, 20% on lunch and smoke breaks and 20% “lost on low labor intensity,” said Kalinin Putin at the meeting of the Council for strategic development and priority projects at the end of March.
Prime Minister Dmitry Medvedev instructed the Ministry of economic development to approve the passport priority programme on performance to 21 April, and to submit for consideration in August. Project office of the government programme “Support of Russia” has not received, said his spokesman. The Ministry of economic development offers “Support” is not yet officially reported, the Ministry does not exclude that they can be taken into account when developing the project, said the representative office.
Companies will have to specify due to what they increased performance: whether they invested in the equipment, improve the management system, as motivated employees. Downsizing the subsidies will not help: if a company dismisses employees in benefits, but “does not help the state to solve social problem of employment of citizens”, said “the Support of Russia”. As a criterion for subsidies will be considered as well as increased volume of production and the taxes paid.
Pending grants in the current year are paid in the following in the amount of up to 25% of the paid tax in the current year.
If labor productivity in the period of payment of the grant falls, then its amount decreases, and Vice versa. For the base taken the previous record performance, which was assessed to the subsidy.
In each year of the grants the company has the right to increase the amount of depreciation to 25%.
Successful enterprises of the first group may be transferred to the second, if the productivity growth they have stopped. Tax rate on dividends they return to 13%, the tax benefits will be canceled, and grants will be void. To return to the program, they must re-apply.
To account for productivity dynamics necessary to create “open site” where the results would be published legal entities, and thus “to create the spirit of competition”, thinks “Support”. The growth of labor productivity should be one of the main criteria when assessing the effectiveness of CEOs, the average annual growth should be set at 8%. Productivity in the region need to assess and governors (the target was the same 8%). “The financial relations between regional budgets and the state budget are set depending on the rate of productivity growth in the regions that the administration fully contributed to the progressive enterprises, to increase productivity,” suggests “Support of Russia”. Enterprises with growing productivity should have priority access to tenders. The business Association also insists on creating a “state body on labour productivity”, which will monitor the implementation of the program.
Tax benefits now, and so is already too much government involved in their review, said Finance Minister Anton Siluanov. Budget annually loses from them 1.7 trillion, has indicated the Higher school of Economics (HSE) with reference to estimates of the Ministry of Finance.
The ban of manipulation
“Subsidies for productivity enhancement to companies are provided by the government at taxpayers’ expense. Therefore, the tax benefits are provided only when the real increase of labor productivity. Any manipulation of the calculations of productivity growth is forbidden”, — the authors of the program. For example, a ban on artificial reduction of employees using the device in other companies and the actual work on this to companies under contracts of provision of personnel.
If instances of manipulation still, the company will impose a fine of not less than four times the average salary of such workers. Right to subsidies over the last three years the company will lose and will pay the state a fine in their double the size. Vicarious liability for such violations (not less than 10%) will suffer and the shareholders, and the CEO will have to pay 2 million rubles., even if at that time will retire. Outsource only support functions — accounting, legal, translation, transportation, etc.
The risk of manipulation by the companies is great, the Director of the center for business studies Higher school of Economics Georgy Ostapkovich. “Given the mentality of certain entrepreneurs, it can be assumed that will surely start attributing enterprises. And that we will have to artificially rise the labour productivity, which in the end will not affect economic growth?” — he asked. In the “artificial supports” it makes no sense, the companies themselves are motivated in productivity growth indicates Ostapkovich. Inhibit performance in Russia, low level of managerial and technological competences of companies, the lack of development of project financing mechanisms, regulatory barriers, and “high social risks massive cuts and do not always work the mechanisms of fast search of new work and retraining”, said the Minister of economic development Maxim Oreshkin.