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"Proceeds from new enterprises should remain in the regions"

Senator Vitaliy Shuba on how to build budget cooperation to solve the problems of the Baikal region

The Irkutsk Region, the largest constituent entity of the Russian Federation in the Baikal region, according to 2016, showed a decrease in government debt from 28 to 19,6 billion rubles. The reductions were achieved thanks to both the general growth of the regional economy, and subsidies and budget loans from the federal center. EastRussia is told by Priangarya senator Vitaly Shub about how they managed to convince the government to ease the debt burden of a promising region and what role budgetary relations play in arranging the East of Russia.

"Proceeds from new enterprises should remain in the regions"
- The Federation Council is often called the "chamber of regions" of the Russian parliament. Who do you feel more - a federal legislator or a representative of the Irkutsk region?
- Indeed, senators act not only as authors of laws, but as spokesmen for the interests of those constituent entities of the Russian Federation that they represent in the Federation Council. But in lawmaking, each of my colleagues specializes in a particular topic. My direction is the budgetary and tax sphere. It so happened that in the lower house of parliament I worked in the Duma committee on budget and taxes, in the trilateral commission for improving interbudgetary relations. Now I am working in the same field, but already in the Federation Council. In total, there are several dozen laws in force in my parliamentary portfolio. A significant part of them, one way or another, concerns budgetary relations between the federal center and the regions.

- Regions often do not have enough money to close the gaps in the budget, and Moscow requires solving social and economic problems. "Money gives, but not enough," many governors complain.
- Absolutely. Over the past ten years, hundreds of regulations have been adopted - including federal laws, government decrees, presidential decrees - which oblige regions to incur additional financial costs. These gaps must be closed. How? Due to what? Due to the improvement and optimization of intergovernmental relations. This work of the Federation Council Committee on Budget and Financial Markets began more than two years ago. It comes down to an inventory of the spending powers of all three levels of the power vertical: the federal center, the regions, and the municipalities. It is necessary to unambiguously determine which level is responsible for what social expenses.

To date, this work on the inventory of expenditure authorities has been practically completed. As well as work on the redistribution of tax and non-tax revenues between the levels of the budget system. It should be understood that the economic and tax potential of the regions differs. In order to equalize the budgetary provision of the subjects of the federation, a fund for financial support of the regions (FFSR) is provided. However, as a result of the application of a unified methodology for the distribution of subsidies, it turns out that about 40% of the fund's resources are received by only 10 out of 85 RF subjects. My proposal is to distribute subsidized financial assistance to two funds (one for highly subsidized regions that traditionally receive a large amount of financial support from the state, the other for regions with an average and high level of budgetary sufficiency). This idea finds support among my colleagues, including members of the trilateral commission on interbudgetary relations.

Dossier EastRussiaShuba Vitaliy Borisovich, 66 years, Deputy Chairman of the Committee on Budget Policy and Financial Markets of the Federation Council, Doctor of Economics, Professor, Honorary Citizen of Bratsk and the Irkutsk Region. He worked at the upper-air station in Nizhneudinsk, the Bratsk Aluminum Smelter, the Bratskzhelezobeton Combine. In 1990, he was elected a deputy of the Bratsk City Council of People's Deputies, which he headed in 1992. Since 1993 year begins many years of work as a deputy of the State Duma of the Russian Federation, elected by the Bratsk single-mandate district. Since December 2007 - a member of the State Duma of the V convocation on party lists from the party "United Russia". In October 2013, the Legislative Assembly of the Irkutsk region nominated Vitaliy Shuba for the position of representative of the Legislative Assembly from the region in the upper house of the Federal Assembly of the Russian Federation - the Federation Council (SF). Among the recent initiatives - a number of amendments to the draft budget 2017, aimed at increasing support for the regions of Russia. A convinced supporter of the view that the federal center should introduce tax incentives only with the consent of the regions, without prejudice to their interests.

- Thanks to this assistance, the Irkutsk region reduced its debt by almost a third.
- Yes. This year, the subsidy for the Irkutsk region is more than 7 billion rubles, or one and a half times more than last. In addition, the federal center has allocated about 18 billion rubles to the region. grants, subventions and subsidies, including about 1 billion rubles for partial compensation of labor costs for public sector employees, 625 million for the road sector, 255 million in the form of budget loans (at a rate of 0,1%). Subsidies are, of course, good. But it is also necessary to create a motivational mechanism for the regions. Today, if a constituent entity of the Russian Federation has shown an increase in the economy, it means that its tax potential, tax revenues have increased. And this leads to a decrease in subsidies from the federal budget! That is, the region has no motivation to grow economically.

Therefore, the following solution to the problem suggests itself: the economic growth that regions provide for themselves through successful business activity in their territories should remain at their disposal. Plus, it's time for the federal center to stop establishing tax breaks on regional and local taxes. If the authorities of the region, territory, city or district deem it necessary, let them themselves introduce benefits to local taxpayers.

- Does the government share this approach?
- Yes, the White House listened to our arguments. And the Cabinet of Ministers decided to introduce restrictions on the establishment of new tax benefits for regional and local taxes by federal legislation by 2018. And from 2018, it is expected to begin the phased cancellation of tax incentives for regional and local taxes, following the recommendations of our dedicated committee. In other words, the Federation Council is currently developing a set of measures to make such changes in the regulatory framework so that the regions have an incentive to develop their own income potential, in particular - the right to retain part of the tax revenues received as a result of providing preferences to certain sectors of the regional economy.

- Intergovernmental relations at the level of "region-municipalities" are no less dramatic than the "center-regions" ...
- And on the example of the Irkutsk region (and any other subject of the Russian Federation), this is clearly seen. Municipal authorities often reproach the regionals for leaving them too small a share of tax revenues. So, at the end of last year, the mayor of Irkutsk came out with an initiative from the municipal community to amend the regional law "On interbudgetary transfers and standards for deducting income to local budgets." The members of the regional parliament supported him. The essence of the changes is to increase in favor of municipalities the share of revenues from personal income tax (PIT) - from 15 to 18%, as well as to leave a quarter of the income received from the application of the simplified taxation system (STS) at the disposal of municipalities.

In fact, the proposals of the municipalities are correct. As the mayor of the capital city, he takes care of the budget revenues, and the heads of other municipalities agree with him. And we have repeatedly discussed his initiative with him, the governor of the Irkutsk region Sergey Levchenko and the speaker of the regional parliament Sergey Brilka also took part in the discussion. As a result, they came to the following decision: do not touch personal income tax, as this is a federal tax and the federal center can change the share of payments to local budgets at any time. And revenues from the simplified tax system, according to which local entrepreneurs work, are quite fair if they remain in large parts of their place, that is, in the budget of municipalities. But this rule will work, as it was originally envisaged, in the 2018 year.

- In general, it follows from what you have said: the authorities at all levels should strive to stimulate economic activity in the territory entrusted to it.
- Of course! To ensure that the financial capacity of that or territory is determined not only by grants and loans from the higher-level budget and bank loans, but, above all, by increasing tax revenues as a result of more productive activities of existing enterprises and the emergence of new ones.

- To this end, in the Far East, they are actively creating TOR - territories of advanced socio-economic development, operating in a special tax and customs regime. Are the TOPs relevant for the Irkutsk region, as a way to stimulate the regional economy?
- Certainly. Although they, as conceived by the government, began to be created in the Baikal region a little later than in the Far East, the Usolye-Sibirskoye ASEZ has already been officially opened in the Irkutsk region. Next in line is the Baikalsk ASEZ. The peculiarity of the Irkutsk ASEZ: they are created on the territory of the monotowns of the same name, whose town-forming enterprises have fallen into decay. Thus, the city of Usolye-Sibirskoye, which is located 90 km north-west of Irkutsk, has traditionally been tied to the local plant "Usoliekhimprom", which produces household and industrial chemicals. And the city of Baikalsk - to the Baikal Pulp and Paper Mill (JSC "BPPM"), notorious for its industrial discharges into Lake Baikal.

Both businesses are now closed. And the first residents are registered in the Usolye-Sibirskoye PDA: SmartSintez LLC (production of disinfectants and antiseptics, SBT-Irkutsk LLC (granulated iron production) and Usolmash LLC (production of mining and processing equipment). 300 million rubles In Baikalsk, within the framework of the TOP, the emphasis will most likely be on tourist and recreational activities, but it is too early to predict how effective the priority development areas in the Irkutsk region will show in terms of economic and financial returns.

- What other growth points, except for the TOP, have become noticeable recently in the Irkutsk region?
- For example, in January, our legendary gold-bearing deposit Sukhoi Log in the Bodaibo district of the Irkutsk region finally acquired, as a result of an auction, an investor backed by the powerful capital of Rostec and Polyus Gold. Undoubtedly, investors will invest in the development of transport and social infrastructure of the Bodaibo region, lost in the taiga.

- How active do you think investments are today in the tourist and recreation sector of the Irkutsk region? The same Chinese, for example?
- You know, in my opinion, we missed the situation with the organization of civilized tourism in the Baikal region. In recent years, under the guise of such tourism (partly as a result of the connivance of the authorities), there has been an unauthorized development of a significant part of the Baikal coast - various cottages, summer cottages, recreation centers ... Where these objects are, there are cars. This is irreparably damaging to the ecology: under the wheels of jeeps the soil is torn, the roots of the unique flora are exposed, the plants are dying. I am afraid that if we give the green light to foreign investors, the process may worsen. Before making such a decision, it is necessary to thoroughly calculate all the possible consequences and take into account all the nuances.

- And today the federal center helps to solve the task of ecological preservation of Lake Baikal?
- Yes. Through the federal target program "Protection of Lake Baikal and socio-economic development of the Baikal natural territory in 2012-2020". The main sources of industrial discharges into lake waters were, as you know, our BPPM (on the territory of the Irkutsk region) and the Dzhida tungsten-molybdenum combine in Buryatia, which was closed back in the late nineties. But these enterprises over the decades of their activity have left tens of millions of tons of waste on the coast. And today, within the framework of the Program, measures are being taken to liquidate and recycle them: the construction of solid waste landfills, waste transfer stations, the destruction of landfills and land reclamation.

The front of work is gigantic - more than 140 settlements, where 122 thousand people live. The volume of financing for nine years is about 58 billion rubles. Of these, more than 48 billion - from the federal budget, and 7,5 billion - from the regional budgets of the Irkutsk region, Buryatia and the Trans-Baikal Territory. Three years ago, a new attack came to Baikal - the so-called Spirogyra alga. The plant covered shallow areas in lush color almost along the entire perimeter of the lake. Nobody knows how to deal with the dangerous flora. Scientists are working on the question of the reasons for its appearance. One of the versions is that the growth of Spirogyra is the result of the use of chemical detergents by enterprises in technological processes. These detergents, passing through the treatment facilities, destroy their biological treatment, and then untreated wastewater enters the lake. There is my appeal to the General Prosecutor's Office of the Russian Federation to inspect such enterprises for their compliance with environmental legislation.

- If you talk about other socio-economic issues relevant to the region, as far as I know, your mediation was very effective in resolving the conflict between the two employers of the region - Sayanskkhimplast and Rosneft. How did you manage to bring the parties to the world?
- Well, I would not say that it was an open conflict. Just certain disagreements, which, however, brought both companies to trial. The bottom line is that Sayanskkhimplast (SKhP) produces (in addition to other chemical products) polyvinyl chloride - a material widely used in various industries. And the feedstock for this production - ethylene gas - is traditionally supplied to it by the Angarsk Polymer Plant (AZP), a subsidiary of Rosneft. But he does it without concluding a long-term contract, where prices and volumes of supplies would be fixed. That is, for many years, both counterparty enterprises have been deprived of the opportunity to plan economic activities in terms of the production and sale of their products.

If the parent company, Rosneft, had given permission to Angarsk Polymer Plant to conclude such an agreement with Sayanskkhimplast, the issue would have been removed from the agenda long ago. But the situation only worsened after an accident occurred at the plant in February last year and the supply of ethylene to the plant stopped. The enterprise, which provided about half of all the country's needs with polyvinyl chloride and more than 2 thousand jobs in the Irkutsk region, stopped. Only four months later, supplies were resumed, but again without a contract and at a price that did not seem to be profitable for the buyer of ethylene. Then, as a member of the Federation Council from the Irkutsk region, I sent a letter to the Russian government asking to consider the situation around Sayanskkhimplast. Then he initiated a meeting on this issue in the Federal Antimonopoly Service.

I cannot say that only through my efforts (many parties and authorities participated in the process), but just before the new year, NK Rosneft and Sayanskkhimplast JSC entered into a settlement agreement during the next session of the Arbitration Court of the Irkutsk Region. The parties agreed on the price and volumes of ethylene supplies. And, in the near future, the issue of concluding a full-fledged long-term contract will be resolved.

Alas, during those months that the company did not produce PVC, the regional and Russian markets managed to be occupied by Chinese companies. And now it will be very difficult to restore its previous share to the enterprise.

EastRussia HelpThe Irkutsk Region is located in the southern part of Eastern Siberia and is part of the Siberian Federal District of the Russian Federation. This is one of the three subjects of the Russian Federation located around Lake Baikal. Area - 767,9 thousand square meters. km (almost like the area of ​​Turkey). Population - 2,3 million. The basis of the regional industrial complex is non-ferrous metallurgy, timber, woodworking and pulp and paper industry, mechanical engineering and metalworking, electric power, fuel, chemical and petrochemical industries. The share of these industries accounts for about 88,1% of the gross industrial output of the region. Following the results of 2016, the Irkutsk region demonstrated industrial growth by 5,7%, agricultural production growth - by 5,9%, investment growth by 4,3%, growth in the volume of construction work - by 24, 3%. At the same time, real incomes of the population fell by almost 10%, and retail trade - by 5,7%.

- The powerful technical, scientific and human resources are concentrated in the Baikal area. The population here is about the same as in the Far East - about six million people. Maybe it's worth combining these regions into one 12-million macroregion, with a single management center, common investment standards, common preferences for all? ..
- In the context of federal target programs, such a merger has already taken place. For example, both for Eastern Siberia and the Far East, it is important to solve the problems of transport accessibility, increase in population, more efficient energy supply, development of industries with a high degree of processing, environmental protection, and many others. And a corresponding regional component is already being laid down in the nationwide sectoral programs.

Moreover, today the Federation Council is discussing a draft law (it is being prepared by a working group headed by Senator Vyacheslav Shtyrov, I am also a member of it) "On special conditions for the accelerated development of the Far East and the Baikal region." It spelled out the directions of industrial policy for the two macroregions, the specifics of regulating budget and tax legal relations, tools for the development of the agro-industrial complex and mechanisms for effective control over the implementation of environmental and environmental legislation, special regimes of price and tariff policy. The adoption of this law presupposes amending many of the current federal laws: on environmental expertise, on state regulation of aviation development, on customs tariffs, on state social assistance and pensions, on non-profit organizations, etc. That is, the legal framework will be adapted to the objective needs of the development of the east of the country in order to make the overall system of the Russian Federation more stable and economically efficient.

And in this context, I do not see any reason to do any enlargement, say, territorially and administratively.

- What bills are you still working on today?
- Together with my colleagues - Senator from the Ulyanovsk Region Sergey Ryabukhin and Senator from the Rostov Region Yevgeny Bushmin - we have prepared two bills by the beginning of this year aimed at bringing order to the production and circulation of alcoholic and alcohol-containing products. The first involves the introduction of amendments to the Criminal and Criminal Procedure Codes of the Russian Federation, which toughen the punishment for counterfeiting excise stamps and the illegal sale of alcoholic and alcohol-containing products. Now for such crimes as the circulation of alcohol without a license and forgery of excise stamps, a fine of up to 300 thousand rubles and a prison term of up to three years are provided. Our option: a fine of up to three million rubles, or forced labor or imprisonment for up to three years. (Note: the bill was adopted by the State Duma in the first reading on March 10). The second bill is designed to exclude illegal alcohol and alcohol-containing products from other countries from entering Russia. Among the measures we propose: equip railway transport transporting alcohol and products derived from it with the GLONASS system (to track where, to whom, and in what volume all this is received), limit the transportation of alcohol to the territory of the Russian Federation for personal use by five liters, prohibit the sale of alcohol and alcohol-containing products via the Internet and other methods of countering offenses.

- Is this so that the recent Irkutsk tragedy does not repeat itself, when people were poisoned with hawthorn tincture?
- Including to prevent such cases. But we in the Federation Council began to work on the "alcohol theme" since the beginning of 2015. The chairman of the upper chamber, Valentina Matvienko, then initiated the creation of a working group, which I also entered. The reason for this was a decrease in monetary receipts to the country's budget from excise taxes on alcohol. There was a massive use of tricks from unscrupulous entrepreneurs to circumvent the payment of this form of tax. Therefore, we made a number of relevant changes to the Tax Code. As a result, in ten months of 2016, the volume of confiscated counterfeit alcoholic products reached 37 million liters, and the level of collection of excises for strong alcohol increased by 36 billion rubles compared to the same period of 2015.
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