Central regions | Finance, business

Government reports massive SME closures, Kremlin argues

29 Oct '19
According to the most recent findings from Russian Economic Development Ministry analysts, between August 2018 and this past August 668,000 legal entities categorized as SMEs closed. The key reason was the overall deterioration of Russias economic conditions.

The number of SMEs has declined 5.2% over the last four years, the U.S.-Russia Business Council reported, quoting Minister Oreshkin. The Ministry cited in part the negative effect of the VAT raise, and the expiration of certain reduced insurance premiums.

The Ministry does not rule out further closures when the current simplified SME taxation is canceled (which is on the table), and cited the risk of not fulfilling the National Project on SMEs, which calls for raising SME employment from 15 million to 25 million people by 2024 (adding, though, that its premature to conclude the National Project has already failed as it was only launched earlier this year).

At the same time, the Ministry said that Russia still has a high per capita figure of entrepreneurs compared to many other countries.

The Moscow Kremlin disagreed with the Economic Development Ministry data, saying that the information on closures absolutely did not correspond with the data the Kremlin had.
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