28 Oct 2019 16:37

Interbudgetary relations need adjustment to stimulate regions to offer investment tax preferences - Oreshkin

ST. PETERSBURG. Oct 28 (Interfax) - The federal government should support regions that offer companies investment preferences on the profit tax, and for this to happen, interbudgetary relations need to be adjusted, Economic Development Minister Maxim Oreshkin said at a strategists' forum.

"We need to take a number of additional measures [to accelerate growth]. We've created such a list. I won't talk about it in detail now, it's being approved by the government, but I'll touch on one element, what I consider to be most important at this stage. At this stage, our credit cycle is unfolding smoothly for now. We, of course, need to give additional incentives to increase investments at the regional level," Oreshkin said.

"Here we have two very important areas: the first is, of course, introducing an investment tax preference. There already is such an instrument in legislation, in the Tax Code. But the regions still aren't introducing it very eagerly for the understandable reason that in the first stage, it always leads to revenue losses, because companies can deduct the investments they're making from taxes. The second area is infrastructural expenses. Again, you pay money now and get an effect in a few years," he said.

"These two initiatives are impossible without certain support from the federal center and certain amendments to approaches in interbudgetary relations, the handling of increases in deficits [at the regional level] that will happen in the first stage," Oreshkin said.