SANCTIONS: Cabinet of Ministers submits to Duma package of bills to support economy in Russia

*Measures include tax breaks for citizens, increased opportunities for investors

The Russian government has submitted to the State Duma a package of bills to support the economy and the population in the face of new Western sanctions. This was reported by the press service of the Cabinet.

These measures, which Prime Minister Mikhail Mishustin spoke about on March 9 at a meeting of the Cabinet of Ministers, include a number of tax breaks for citizens, measures to support the transport and construction industries, the hotel business, pharmaceuticals, expanding opportunities for investors, including in specially created territories, and others

The day before, Mishustin, speaking about the prepared initiatives, emphasized that Russia’s action plan under the sanctions would be constantly updated, based on the situation.

According to him, “the government is preparing measures on a systematic, permanent basis.” At the same time, the prime minister expressed confidence that “the turbulence associated with the sanctions will end.”

Citizen support

The government proposes to exempt citizens from paying income tax on interest on bank deposits that exceed 1 million rubles. This decision is planned to be extended to the payment of taxes on income from deposits for 2021-2022. The bill also proposes to exempt from taxation the income of citizens from savings on interest for the use of borrowed funds in 2022-2023.

The bill also includes a provision to adjust the increased transport tax on expensive cars. Now it will be charged on cars worth more than 10 million rubles, and not from 3 million rubles, as it was before.

These measures are included in the draft law on amendments to the Tax Code of the Russian Federation.

Hotels and pharma

The government proposes to support the hotel business by exempting it from VAT for five years – this will affect hotel owners, as well as investors who build, lease and manage tourist facilities (hotels and other accommodation facilities).

The Cabinet of Ministers also sent the deputies a draft on regulating the admission of foreign drugs to the Russian market.

According to the document, in the event of a shortage of medicines in 2022, the Cabinet of Ministers will be able to decide on a simplified procedure for admitting foreign medicines to the Russian market. We are talking about the fact that, by decision of the government, newly registered foreign drugs will be able to be sold in Russia until December 31, 2022 in foreign packaging with a label in Russian (now only in Russian packaging).

Transport

Another Cabinet bill includes measures to support civil aviation, maritime and inland water transport, as well as rail and road transport, which is facing sanctions pressure from Western countries. In particular, it contains rules that allow registering the rights to foreign aircraft leased by Russian companies and issuing Russian airworthiness certificates to them. This measure will help Russian airlines to keep the fleet of foreign aircraft and will enable them to operate on domestic routes.

The government will also have the right to restrict the entry of foreign ships from the list of unfriendly countries into Russian ports and inland waterways. In addition, the bill provides for the postponement of the certification of technical means of ensuring transport security, which will allow companies to redistribute financial resources in the current conditions.

Construction

The construction industry of the Russian Federation under the sanctions, according to one of the bills, can count on simplifying the development of urban planning documentation, preferential lease of land and other support measures that will help Russian builders maintain high rates of commissioning of civil and industrial facilities.