The Ministry of Finance talked about the five challenges to accelerate the economy

The Ministry of Finance talked about the five challenges to accelerate the economy


The Finance Ministry on Thursday, April 20, held the expanded Board, which concludes in 2016 and has announced goals and objectives for the near future. The Board was made by Prime Minister Dmitry Medvedev: it announced that it considers a major victory at the end of last year the termination of the downturn in the economy. The Prime Minister said that in 2016, the Finance Ministry turned into “superbeasto”: its management was handed over to the FTS and FTS, Identified, and eliminated the powers of Rosfinnadzor transferred to the Treasury. This year, the extension of the functions of the Ministry of Finance continued: now through FNS, the Agency administers social insurance contributions, and will single-handedly curate the field of public procurement. “These decisions allowed us to improve control over revenues to the budget, to move the coordination of the work in this sphere in one hand,” — said Medvedev.

Last year, the Russian economy has shown the ability to “quickly adapt to shocks and create new sources of growth,” said Finance Minister Anton Siluanov. He noted that now Russia has strong balance of payments, low inflation, and the structure of the economy has become more healthy. “However, without the implementation of structural changes, the growth will run into the “ceiling of potential of the economy”, which, according to estimates, is not higher than 1.5% per year. In this case, we have more ambitious — ensuring economic growth rate not below average, that is 3-3,5% per year”, — said Siluanov.

“Enough money”

To help accelerate the economy, the Finance Ministry set itself five goals. The first is freedom from oil dependence with the new budgetary rules. Under the old budgetary rules a large part of the market revenues are spent on government spending. “The use of these revenues created the illusion of prosperity, which dissipated as soon as he disappeared market revenues. In fact, we ourselves provoked fiscal crises,” admitted the President. The design of new fiscal rules the Agency intends to include in the draft budget for 2018 to 2020, although the transition budget applies from February, according to Siluanov, have helped to reduce the dependence of the ruble on the price of oil, to reduce the risks of investment in Russian assets. The head of the Central Bank Elvira Nabiullina participated in the Board meeting, agreed.

Another growth factor — predictable conditions for doing business and tax policy. In 2017, the Ministry plans to develop the construction of the tax system in the medium term, as well as the “code of non-tax payments”, said the Minister, with the introduction of new fees and modifying existing should be as predictable for business extent of predictable tax changes.

For higher economic growth is necessary to overcome structural constraints — low quality of human capital, inefficient public administration, poor investment climate. “We have in the budget enough money. The main thing — effectively to dispose of them,” — said Siluanov. The basis for this, according to the Minister, should become the project approach. Five pilot state programs — “Education”, “Health”, “housing”, “Transport” and “Agriculture” — will be fully translated into mechanisms of project management.

Igor Shuvalov and Dmitry Medvedev (left to right) during the extended meeting of the Ministry of Finance of the Russian Federation

Photo: Dmitry Astakhov / TASS

Unfair to punish the players

The second objective of the Ministry of Finance — reducing the administrative burden and ensuring equal competitive conditions for business. The Agency plans to achieve this goal at the expense of growth in tax collection, reduce the administrative burden on honest businesses and the tightening of conditions for “grey” enterprises, the introduction of information technology. System ask-VAT-2 control VAT enabled to increase tax revenues by 0.5% of GDP, the introduction of yegais increased revenues from excises on strong alcohol 28%, and the labeling of fur products has led to an increase in legal trade of these products several times, gave examples Siluanov.

Need to keep the economy out of the shadows, including through economic and tax incentives. Here, according to the Ministry of Finance, can work and discuss the authorities of the tax maneuver (increase in VAT rates while lowering health insurance premiums), and the extension of cashless payments, improving traceability of products and operations. It measures the output of the shadow economy has avoided raising taxes in the crisis, said Siluanov.

You need to improve the efficiency of state-owned companies, once again, said Siluanov. Dividends at 50% of net profit under IFRS, in the budget, will not only bring revenues to the Treasury, but also to increase the capitalization of the companies, the Finance Ministry said. However, a number of companies does not think so, admitted the speaker. But the state “has the asset and this asset should receive income commensurate with the yield that is emerging in the market,” the Minister said. Evaluation of the effectiveness of company executives should take into account the amount of the paid dividends, he added.

Overall health

The third purpose of the financial Ministry called the efficiency of the budget. For this you need to continue integration of the budget process and public procurement, increase transparency of procedures. The Ministry of Finance also intends to expand the Institute’s support of the Treasury: this year, its effect already applies to defense contracts (except for contracts of the defense Ministry and intelligence/counter-intelligence services), and in 2018 — for contracts with a single supplier. Treasury support makes “more effective” to treat the expenditure of budgetary funds, said Siluanov. The Finance Ministry intends to develop the concept of increase of efficiency of budget expenditures, said Siluanov, the first result of this work will be the preparation of proposals for optimization of costs within the budget in 2018-2020.

The fourth objective of the Ministry of Finance — establishment of a healthy financial system. Then, believe in the Ministry of Finance, will be able to transform savings into effective investments. In 2017 it is necessary to change the mechanisms of financial recovery of banks and to create a tiered banking system, said Siluanov. This will allow banks to operate more efficiently and thus increase the level of confidence in this institution, the Minister explained. The Ministry of Finance also plans to expand banking tools: introduce into law the concept of the syndicated loan, the possibility of granting “irrevocable” savings certificates and to open a Deposit of precious metals. The Ministry of Finance is preparing to issue Federal loan bonds for people in the future will be government bonds issued in Chinese yuan.

The fifth objective of the Ministry of Finance — improvement of regional Finance. In recent years, managed to achieve a balance of regional budgets, their debt fell by more than 130 billion rubles, said Dmitry Medvedev on Board. At the end of last year, the deficit budgets of the regions fell to the lowest since 2008 level of 12.5 billion rubles, Siluanov added, reduced the number of “deficient subjects” reduced the number of regions with debt levels above 100% of its income. “Measures to improve intergovernmental fiscal relations envisaged in 2017, will improve regional finances,” — said Siluanov. This year, the Ministry of Finance will assess expenditure commitments of the regions and will strengthen the financial independence of local budgets, he announced. And regional leaders who provide rehabilitation budgets may tighten personal responsibility, the Minister warned.Save