Building budget revenue amidst low oil prices is possible by legalizing people who make shadow income.
There are 10 to 15 mio people in Russia who work illegally and their taxes could become Russia’s new oil, according to YouDo founder and Headliners club member Denis Kutergin. The expert shared this opinion at the meeting titled “HR and HRTech. Is there work during and after the lockdown?” of the Headliners private investment impact club.
“The self-employed people who are not registered with the unemployment benefit office and who do not work officially could become the country’s new oil. These are the people who could become taxpayers if they are provided with work – and not just orders from private customers which they can already get now but orders from businesses and even public agencies and the government,” Denis Kutergin explained.
He pointed out that it is the state that remains the country’s largest vendor, including when it comes to services. Earlier this year, the government passed a bill that allowed self-employed workers to benefit from certain privileges when they participate in public procurement.
“The self-employed are now equivalent to small and medium-sized businesses. As a self-employed, you can now participate in public procurement. People just don’t know about it,” Denis Kutergin said.
He believes that with orders from the state, municipal services and businesses, it will not be a problem to provide 10 to 15 million people with regular work – meaning these people will start paying taxes.
“We could minimize the impact of the crisis with such projects,” YouDo founder believes.
Currently, self-employment as a status is available in 23 Russian regions in trial mode. Since the experiment started, more than 500K people switched to the new tax regime.
The status is available to entrepreneurs whose income does not exceed RUR 200K ($2.7K) per month and who do not hire employees. Self-employed workers pay 4% in taxes if they work with individuals and 6% if they take orders from companies.