Best thing to do now is stay home – President


“We are witnessing an acute escalation of the coronavirus epidemic on a global scale. The number of new cases continues to grow in many countries. The global economy as a whole is at risk, and is already expected to shrink,” Vladimir Putin said in his address to the nation on Wednesday. According to the presidential web page, “The immediate priority is to prevent the quick spread of this disease.”

“I declare next week to be an official non-work period while maintaining wages. In other words, the days off will last from Saturday March 28 to Sunday April 5,” he said. “Of course, all public infrastructure facilities, including medical facilities, pharmacies, stores, institutions responsible for banking and financial settlements, as well as transport, and ministries and agencies at all levels, will continue working. We must protect ourselves, our families and friends, and we must adopt a more disciplined and responsible approach. Trust me: the best thing to do now is stay home.”

As the President noted, “The Russian economy is experiencing substantial headwinds due to the effects of the epidemic. And we need to support those who may lose their jobs.”

Among various support measures, he suggested declaring consumer loan and mortgage holidays. He also said it is necessary to defer all taxes on small and medium-sized businesses, except for VAT, for the next six months. In addition, micro businesses should also be granted a deferral on their contributions to social insurance funds. Bank loans held by struggling SMEs and micro businesses must also be deferred for the next six months.

Putin proposed “A six-month moratorium on bankruptcy claims by creditors against companies and on the recovery of debts and penalties and to cut their insurance contributions in half, from 30 to 15%. This reduced rate will apply to any salary above minimum wage.”

“I suggest that those expatriating their income as dividends to foreign accounts should pay a 15% tax on these dividends,” he said. “For that, we will need to amend Russia’s double taxation treaties with some countries. If our foreign partners do not accept our proposal, Russia will unilaterally withdraw from these treaties.”

To support people and companies in difficulties, “I propose that people with over RUR 1 mio ($12.5K) in bank deposits and debt securities pay a 13% tax on this income,” he concluded.

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