Russian airlines have billions in debts, need reduced VAT extension - RSPP
MOSCOW. Oct 27 (Interfax) - Russian airlines have accumulated tens of billions of rubles of debt to banks, the government and suppliers, so they need to have the reduced value-added tax (VAT) rate for domestic flights extended to the end of 2024, the Russian Union of Industrialists and Entrepreneurs (RSPP) said in its report on the draft budget for 2021-2023.
"Airlines have accumulated several tens of billions of rubles of debt to banks (including on subsidized loans), the budget (on payment of taxes for which deferrals were granted) and suppliers (including lessors) that will need to be paid off in the course of 2021. In the low winter season of 2020-2021, amid restrictions on international air travel, Russian airlines' losses will continue to grow," the RSPP said in the report, which has been published in parliament's electronic database.
The big business lobby proposed to extend the reduced VAT rate of 10% for domestic passenger and baggage services until December 31, 2024.
The draft budget for 2021-2023 submitted to the State Duma projects almost 143 billion rubles in revenue from the cancellation of this tax break, including 43.96 billion rubles in 2021, 47.31 billion rubles in 2023 and 51.51 billion rubles in 2023.
The 10% VAT on all domestic flights was introduced to support the industry in 2016 for the period to 2021. Last year, the government introduced a separate tax break, an indefinite zero VAT rate, for domestic flights that bypass Moscow. The VAT rate for all flights to Crimea, Kaliningrad and cities in Russia's Far East is also zero, and the Finance Ministry has said there are no plans to change it.