Assistance in action: in the Vitebsk region, single tax rates for individual entrepreneurs and self-employed have been halved
In the Vitebsk region, for the first time in the country, the single tax rates for individual entrepreneurs and self-employed citizens have been halved. Small businesses will be able to count on such support in the second and third quarters of this year. A decision that is not the easiest for the budget, but very necessary, was made at the session of the Vitebsk Regional Council of Deputies.
Local authorities have been granted the right to apply reduced coefficients to land and property taxes. With a mandatory condition: the landlord must also meet the individual entrepreneurs halfway and reduce the rental fee.
Rescuing the Affected
According to the regional tax inspectorate, this will allow supporting more than 9,000 taxpayers, says Alexander Trofimov, head of the entrepreneurship department of the Vitebsk Regional Executive Committee's economy committee:
— Deputies took advantage of the opportunity provided by Decree of the President No. 143 "On Supporting the Economy". The local decision to ease the burden for entrepreneurs and self-employed came into force on Saturday, May 16.
According to preliminary estimates, these measures will cost the regional budget 2.2 million rubles, but this is fully justified. As monitoring conducted by the tax authority has shown, single taxpayers fall into the category of the most affected sector of small business. Entrepreneurs complained about the decline in consumer demand, border closures, and high rental rates that remained at the previous level. In some areas, April revenue decreased by two or even three times. At the same time, the single tax rate is fixed and must be paid in advance, points out Alexander Ivanovich:
— Today, for the aforementioned category of taxpayers, in addition to reducing payments, there is an option to switch to another tax regime from the beginning of any month: a simplified system or income tax payment. Only the revenue received will be subject to taxation, and the tax will need to be paid quarterly, not in advance.
We remind you that the single tax rates for individual entrepreneurs and self-employed are fixed and depend on the type of activity. The amounts vary significantly.For example, private wrestling lessons on the periphery will cost someone a single tax of 45 rubles. However, trading in motor vehicles will cost as much as 360 rubles. At the same time, it would be incorrect to differentiate between individual entrepreneurs and self-employed individuals in terms of who needs tax breaks more, the interlocutor continues:
— It's difficult for everyone now, and assistance will be provided to every small business representative. A separate issue is the conflict of interests between owners and tenants of retail space. For example, entrepreneurs from some markets and shopping centers in Vitebsk, Polotsk, and Novopolotsk have previously appealed for influence on landlords. The rental amounts seemed unaffordable to them, disproportionate to their current real incomes.
"This is not a deferral, but gratuitous assistance"
Hence, another piece of good news! Local authorities have been granted the right to apply reducing coefficients to land and property taxes. With a mandatory condition: the landlord must also meet individual entrepreneurs halfway and reduce the rental fee. It is important to understand that you will not have to compensate for a halved single tax, the interlocutor emphasizes:
— This is not a deferral, but gratuitous assistance. We hope that our small business will be able to return to its pre-crisis level.
In recent years, individual entrepreneurs have contributed the lion's share to the growth of small and medium-sized businesses in the north of Belarus. As of April 1, over 23,000 individual entrepreneurs were registered in the Vitebsk region, or 5 percent more than in 2019. The highest growth rate is in 14 rural districts, including Beshenkovichi (12.5 percent), Dubrovno (12.2 percent), and Liozno (11.9 percent). The news that the single tax is now halved is a pleasant surprise for many businessmen from the regions. State support is more relevant than ever, admits Alesya Romanyuk from Dubrovno:
— For comparison: if I usually paid a little over 200 rubles, now this amount will be around one hundred. Will I feel the difference? Naturally. I have been trading in building materials for seven years and I don't remember my business ever struggling this much. The flow of customers and revenue have decreased, you could say, by half., although it is spring – the standard peak of sales. The picture is alarming: there are fewer and fewer buyers, people try not to leave their homes unnecessarily and frankly say that they are not thinking about renovations, but about everyone being healthy. Therefore, the halved single tax rate is an important step towards us, entrepreneurs, during this difficult period.
Elena Martinovskaya, a manicure master from Beshenkovichi, agrees with this opinion. By the way, she first took advantage of state preferences two years ago, switching from sole proprietorship to self-employment. Elena rented a modest six-square-meter room from the local KBO and enthusiastically set about doing beauty. Elena has a client base built up over the years, but about a third of them have dropped out for now, the interlocutor sighs:
— I also spent some time in self-isolation. I thought it was the right, safer thing to do. Although even before that, I worked strictly in a mask and always used antiseptic. Now I'm catching up on what I've missed, including profits. The decision to reduce the single tax is timely and necessary. Yes, these amounts may not seem significant to everyone. For example, my usual tax payments are 23 rubles, now I will pay half to the budget – 11.5. The difference is not colossal, but at the same time, any help is, above all, attention, an indicator that your problems are understood and not ignored.
Rescuing the Affected
According to the regional tax inspectorate, this will allow supporting more than 9,000 taxpayers, says Alexander Trofimov, head of the entrepreneurship department of the Vitebsk Regional Executive Committee's economy committee:
— Deputies took advantage of the opportunity provided by Decree of the President No. 143 "On Supporting the Economy". The local decision to ease the burden for entrepreneurs and self-employed came into force on Saturday, May 16.
According to preliminary estimates, these measures will cost the regional budget 2.2 million rubles, but this is fully justified. As monitoring conducted by the tax authority has shown, single taxpayers fall into the category of the most affected sector of small business. Entrepreneurs complained about the decline in consumer demand, border closures, and high rental rates that remained at the previous level. In some areas, April revenue decreased by two or even three times. At the same time, the single tax rate is fixed and must be paid in advance, points out Alexander Ivanovich:
— Today, for the aforementioned category of taxpayers, in addition to reducing payments, there is an option to switch to another tax regime from the beginning of any month: a simplified system or income tax payment. Only the revenue received will be subject to taxation, and the tax will need to be paid quarterly, not in advance.
We remind you that the single tax rates for individual entrepreneurs and self-employed are fixed and depend on the type of activity. The amounts vary significantly.For example, private wrestling lessons on the periphery will cost someone a single tax of 45 rubles. However, trading in motor vehicles will cost as much as 360 rubles. At the same time, it would be incorrect to differentiate between individual entrepreneurs and self-employed individuals in terms of who needs tax breaks more, the interlocutor continues:
— It's difficult for everyone now, and assistance will be provided to every small business representative. A separate issue is the conflict of interests between owners and tenants of retail space. For example, entrepreneurs from some markets and shopping centers in Vitebsk, Polotsk, and Novopolotsk have previously appealed for influence on landlords. The rental amounts seemed unaffordable to them, disproportionate to their current real incomes.
"This is not a deferral, but gratuitous assistance"
Hence, another piece of good news! Local authorities have been granted the right to apply reducing coefficients to land and property taxes. With a mandatory condition: the landlord must also meet individual entrepreneurs halfway and reduce the rental fee. It is important to understand that you will not have to compensate for a halved single tax, the interlocutor emphasizes:
— This is not a deferral, but gratuitous assistance. We hope that our small business will be able to return to its pre-crisis level.
In recent years, individual entrepreneurs have contributed the lion's share to the growth of small and medium-sized businesses in the north of Belarus. As of April 1, over 23,000 individual entrepreneurs were registered in the Vitebsk region, or 5 percent more than in 2019. The highest growth rate is in 14 rural districts, including Beshenkovichi (12.5 percent), Dubrovno (12.2 percent), and Liozno (11.9 percent). The news that the single tax is now halved is a pleasant surprise for many businessmen from the regions. State support is more relevant than ever, admits Alesya Romanyuk from Dubrovno:
— For comparison: if I usually paid a little over 200 rubles, now this amount will be around one hundred. Will I feel the difference? Naturally. I have been trading in building materials for seven years and I don't remember my business ever struggling this much. The flow of customers and revenue have decreased, you could say, by half., although it is spring – the standard peak of sales. The picture is alarming: there are fewer and fewer buyers, people try not to leave their homes unnecessarily and frankly say that they are not thinking about renovations, but about everyone being healthy. Therefore, the halved single tax rate is an important step towards us, entrepreneurs, during this difficult period.
Elena Martinovskaya, a manicure master from Beshenkovichi, agrees with this opinion. By the way, she first took advantage of state preferences two years ago, switching from sole proprietorship to self-employment. Elena rented a modest six-square-meter room from the local KBO and enthusiastically set about doing beauty. Elena has a client base built up over the years, but about a third of them have dropped out for now, the interlocutor sighs:
— I also spent some time in self-isolation. I thought it was the right, safer thing to do. Although even before that, I worked strictly in a mask and always used antiseptic. Now I'm catching up on what I've missed, including profits. The decision to reduce the single tax is timely and necessary. Yes, these amounts may not seem significant to everyone. For example, my usual tax payments are 23 rubles, now I will pay half to the budget – 11.5. The difference is not colossal, but at the same time, any help is, above all, attention, an indicator that your problems are understood and not ignored.
Newspaper "Respublika". Photo from the newspaper "Vitebskiye Vesti" is illustrative.