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Russia: economic measures to fight COVID-19

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Russia: economic measures to fight COVID-19

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Despite the (relatively) limited number of cases, the Russian government is taking serious measures to contain risks inherent COVID-19 threat.

Starting from Monday, several activities will stop and people will be allowed to move only for specific cases. It’s important to remind that starting from March 27th, all Russian flights (inbound and outbound) are CANCELLED.

Russia has been managing debts and economic spending very carefully in the last years so it’s headed to cope with the crisis much better than others. Ruble has been losing against EUR and USD as expected last week but the large amount of gold stockpiled in Russian vaults is a strong insurance against a currency was.

Anyway, an economic downturn s expected: the oil price is already at the bottom and the demand is likely to decrease due to the expected world recession.

Below the measures decided to support the economy and people

Community Support Measures

  • All social benefits and benefits for six months should be renewed automatically without additional information.
  • Payments to veterans on the occasion of the 75th anniversary of Victory should be made before the May holidays.
  • Starting in April, 5 thousand rubles will be paid to all families entitled to maternity capital. monthly for each child up to 3 years old inclusive.
  • Payments promised by Putin in a January letter to the Federal Assembly for payments for children from three to seven years old will be made not from July, but from June.
  • A new norm for sick pay is established - at least a minimum wage (12,130 rubles. - RBC ) per month until the end of 2020.
  • Unemployment benefits will be increased to the minimum wage.
  • Vacations on consumer and mortgage loans for citizens who find themselves in a difficult economic situation (with a reduction in monthly income by more than 30%) and for individual entrepreneurs.
  • Revision of bankruptcy proceedings.

Business Support Measures

  • Provide a deferral of all taxes, excluding VAT for six months, for medium and small enterprises.
  • For enterprises that find themselves in a difficult situation, a six-month moratorium is introduced on filing applications from lenders to recover fines.
  • The government has been instructed to monitor the situation and expand the list of industries in need of support.
  • Reduce insurance premiums for small and medium-sized enterprises to 15% for employees with salaries higher than the minimum wage. If the salary is at the minimum wage level and below, the rate will remain the same - 30%.

Income taxes

  • For those who withdraw income in the form of dividends to foreign accounts, provide a tax rate of 15%.
  • For citizens whose total amount of deposits and investments in debt securities of which exceeds 1 million rubles, set the tax on interest income at 13%.

As usual, SAFSERVICE consulting is here to help you clarify doubts and discuss issues in performing business in Russia.

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