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The Legislative Duma of Tomsk Oblast
March 16, 2010. Tomsk Oblast Duma Speaker took part in the session of the Council of Legislators of the Russian Federation
 On March 16 Boris Maltsev, Speaker of the Tomsk Oblast State Duma, took part in the session of the Council of Legislators of the Russian Federation which was held in Moscow in the Federation Council of the Russian Federal Assembly.
A major item on the parliament Speakers’ agenda was improvement of the legal framework for Russian small and medium business.
Just in 2008-2009 regional legislative bodies across the country adopted dozens of legislative acts at the federal level and scores at the regional level. However, small business still faces a lot of problems. Among the speakers who touched upon that subject (S. Mironov, Chairman of the Federation Council, Speakers of the Legislative Assemblies of Tver and Sverdlovsk Oblasts, Krasnodar Territory, and Moscow) was Boris Maltsev. He drew the attention of his counterparts to two issues.
First, it is crucial to bring back and update the law on the unified tax on imputed earnings for certain types of activity.
This law proved very efficient in Tomsk Oblast in its time (adopted in 1988) and provided the regional law-makers with broad powers in development of small business. That law laid the foundation for a feasible and reasonable approach to small business taxation, simplification of the accounting procedures and tax reporting. Over the first 3 years in effect the law helped increase the number of small businesses 1.5 times – up to 7000.
In 2002, small business companies in Tomsk Oblast employed approximately 100,000 people, i.e. every fifth person of the economically active population. However, in 2003 the Russian Federation State Duma adopted the Tax Code which significantly restricted the range of application of that law.
Three years later a decision was made at the federal level to grant the power to establish tax concessions under that law to the local authorities and restrict the regional law-makers from that process. But what can we do about a village with only one shop? Reduce the tax for that shop to help another one emerge? Then, that village will be unable to compensate its budget income shortfall. And when the regional Duma was involved, it was able to handle local budget income shortfalls compensating them from the regional budget.
The law on the unified tax must become the ‘root’ legislative act for the whole legal framework for small and medium business activity in the Russian Federation. Still, this system looks cumbersome and the businessman is taking pains in trying to understand it.
‘Small business needs ‘small’, simple and clear legislation, Boris Maltsev said. And we have complicated it to the limit. The owner of a small bakery can hardly understand a provision of a law.’
Second, Mr. Maltsev believes that small and medium businessmen should have access to bank loans.
There is a need to create conditions for a wider availability of microcredits and simplify lending procedures. Such a system should be developed and introduced by the banking community. It should be based on the principle that loans are easily available but related liability is much stricter than today. Now it is quite to the contrary. Instead of giving a loan to a person who will work fingers to the bone out of fear not to repay the loan, banks themselves fear people and escape granting loans.
‘I believe that our Duma should get right down to reviewing the current legislation on small and medium business activity and analyze decisions that were adopted at the federal, regional, and municipal regions’, said the Speaker of the Tomsk Oblast State Duma. ‘How are those decisions put into practice and how do they work? We will also have to make necessary changes and amendments to ultimately create a holistic legal framework for this.’
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