The Classifier of Economic Activities for small and micro businesses for obtaining beneficial credits
On 6 May at the meeting held by the President concerning the implementation of measures taken to support the economy and social sector the minister of economic development, Maxim Reshetnikov, advised that the issue with the Russian National Classifier of Economic Activities (abbreviated in Russian as OKVED) has been solved for the purposes of small and micro businesses obtaining beneficial credits [1].
Indeed, Resolution No. 575 of the Russian Government dated 24 April 2020 amended the previously approved Rules for granting subsidies [2] with clause 7(1) according to which if a small or micro business has at least one of the above types of activity (as any of its activities, not only the principal one) specified in the Unified State Register of Legal Entities or the Unified State Register of Individual Entrepreneurs (abbreviated in Russian as EGRUL and EGRIP respectively) falling within the ‘affected’[3] ones, then they may use the beneficial credit programme.
The above amendments were adopted after the business community appealed for them. Previously Boris Titov, Presidential Commissioner for Entrepreneurs’ Rights, had advised of the problem with obtaining beneficial credits. As a result of a ‘sample purchase’ conducted by him and his executive office 23% of all refusals of banks for granting beneficial credits were grounded that the type of economic activity does not meet the list of the ‘affected’ sectors [4].
Please note that the specified Resolution has expanded the possibility of participation in the programme of beneficial credits for all enterprises irrespective of their actual sizes (initially the programme was implemented solely for small and micro businesses). However, for major and medium-sized businesses this issue concerning the granting of the credit will be decided in line with the principal code of OKVED.
Such a solution of the issue with OKVED for small and micro businesses is very necessary and timely. But, in our opinion, in order to provide the most complete support to business, this approach should also cover other measures of state support, for example for taxation purposes.
Indeed, Resolution No. 575 of the Russian Government dated 24 April 2020 amended the previously approved Rules for granting subsidies [2] with clause 7(1) according to which if a small or micro business has at least one of the above types of activity (as any of its activities, not only the principal one) specified in the Unified State Register of Legal Entities or the Unified State Register of Individual Entrepreneurs (abbreviated in Russian as EGRUL and EGRIP respectively) falling within the ‘affected’[3] ones, then they may use the beneficial credit programme.
The above amendments were adopted after the business community appealed for them. Previously Boris Titov, Presidential Commissioner for Entrepreneurs’ Rights, had advised of the problem with obtaining beneficial credits. As a result of a ‘sample purchase’ conducted by him and his executive office 23% of all refusals of banks for granting beneficial credits were grounded that the type of economic activity does not meet the list of the ‘affected’ sectors [4].
Please note that the specified Resolution has expanded the possibility of participation in the programme of beneficial credits for all enterprises irrespective of their actual sizes (initially the programme was implemented solely for small and micro businesses). However, for major and medium-sized businesses this issue concerning the granting of the credit will be decided in line with the principal code of OKVED.
Such a solution of the issue with OKVED for small and micro businesses is very necessary and timely. But, in our opinion, in order to provide the most complete support to business, this approach should also cover other measures of state support, for example for taxation purposes.
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- The meeting concerning the implementation of measures of support for the economy and the social sector.
- The Russian Government’s Resolution No. 422 dated 3 April 2020 “On approving the Rules for granting subsidies from the federal budget to Russian credit institutions to compensate their lost profits from credits issued in 2020 to small and medium-sized businesses for emergency needs for the support and preservation of employment”
- The Russian Government’s Resolution No. 434 dated 3 April 2020 “On approving the list of sectors of the Russian economy adversely affected in the conditions of the deterioration of the situation with the spread of the new coronavirus infection”
- “The project does not work”: Titov has reported about a ‘sample purchase’ of credits for salaries.