Authorities got to the self-employed: how to take a income of 20 million Russians

Old dream of the Russian authorities — to bring from the shadows the informal economy, which employs, according to various estimates, from 13 to 22 million people. This variation in the number of self-employed suggests that their activities are still beyond the control of, and revenues are not taken into account, therefore, does not go to the state in taxes. Of course, budget the extra money, so officials have a couple of years scratching their heads over how to enter in legal field, freelance, put them on a fiscal leash. Before the election, the self-employed decided not to touch, but immediately after again came for discussion. “MK” is parsed, whether there are chances for informal employment to emerge from the shadows safely, taking into account the interests of both the state and its citizens.


Relations between the authorities and the self-employed in recent times were built by the method of carrot and stick. In the past two years, different ministries and departments actively offered their options for the introduction of freelancers in the legal field, frankly onerous and softer, but until recently, the legislation was not even such notion as “self-employed”. The decision of the question was postponed for post-election time, because it became obvious that none of the aforementioned measures will not be popular and will severely hit the well-being of this significant category of the economically active population.

According to Rosstat, the informal labor sector represents about 20% of the country’s workforce, which numbers approximately 76 million people — able-bodied citizens aged 15 to 72 years. While we agreed that until the end of 2018 the self-employed are left alone: Vladimir Putin announced tax break that was undoubtedly a wise decision from the point of view of maintaining electoral support.

Now that elections are behind us, working exclusively for itself, people were under the sword of Damocles: when the holidays are over, the government will not miss the opportunity to get their income their expensive. However, according to the latest news from the legislative field, the government even wants to impose taxes on the elusive self-employed, but does not know how to do it better. The Cabinet approved a draft law to extend the tax holiday until 2019. In other words, the government again took a pause for reflection and acknowledged their inability to once and for all decide the fate of millions of freelancers.

From patents to tax on spongers

Barely a couple of days after the election, both began to appear the first signs of the upcoming state of struggle with the dark side of the economy. Prime Minister Dmitry Medvedev instructed the Ministry of justice to finalize the consolidation of the legal status of self-employed people. His disposal was a measure to fulfill the instructions of President Putin, which he gave at the end of his address to the Federal Assembly of the Russian Federation on March 1, 2018. Over the execution of the order set by the Prime Minister task will be to work with the Ministry of justice, Ministry of labor, Ministry of Finance, Ministry of economic development.

The ministries of enough source material and food for legislative thought on this issue. The last specific proposal in February, it was announced by the head of the Ministry Maxim Oreshkin, to introduce a special tax regime for self-employed, implying a tax of 5-6% of annual revenue which will go to the Pension Fund and insurance premiums. Before that Dmitry Medvedev himself proposed to study the mechanism of acquisition of patents for self-employed activities. Other more or less common initiatives was the introduction of a one-time insurance payment of 10 thousand virtually any a month, or to allow the freelancer status of an individual entrepreneur with giving him all the duties IE. Voiced more radical proposal: we are talking about the notorious tax on parasitism, deprivation of free health care or restrictions on traveling abroad, the self-employed who shelter their income.

It is noteworthy that the average income of self-employed citizens by 20-25% lower than that of workers. As analysts estimated the National Agency for financial studies (NAFI), the average monthly income of self-employed in Russia is 20 800 virtually any. Experts have called the most popular profession freelancer: computer maintenance, repair, design.

Meanwhile, General list of occupations self-employed is striking in its breadth: nannies, nurses, Tutors, translators, photographers, painters, shoemakers, seamstresses, stylists, cosmetologists, barbers, massage therapists, journalists, copywriters, bloggers, taxi drivers-fish, and many others. To date, all these people are in a state of oppressive uncertainty and wondering what will come up the government to average 20 thousand of income to pick up their wages.

Worker with fear and reproach

Of course, nothing prevents a “free artists” now out of the shadows and be legalized by issuing a PI and paying the state a fixed annual payment in the amount of 26,5 thousand roubles on obligatory pension insurance, and about 6 thousand roubles in Fund of compulsory medical insurance (as of 2018). By the way, in 2017, the private entrepreneurs pay 4 thousand virtually any less. Tax holidays, which are pre-election “carrot” for self-employed, offered them another mechanism of legalization: they can register their status and to register at the Federal tax service. Honesty they were supposed exemption from taxes in 2017-2018 and souleles even some preferences, in particular, benefits on Bank lending. However, this measure is wide response from freelancers not found: the proposal of the state have used only about a thousand people. Apparently, people just don’t believe that the state and was suspicious to the promise in the indefinite future benefits.

Summed up the power and that it is too late decided on the concept of “self-employed” — only in mid-2017. As follows from the adopted amendments to the Civil code, this category citizens are persons over the age of 16 who provide services to natural persons and perform work alone “means to systematically make a profit on your own risk”, but not registered as sole proprietors and have no employees.

“Now, Russian laws permitted the maintenance of separate types of entrepreneurial activity without state registration as individual entrepreneurs, — says “MK” the legal side of the issue, the Executive Director of the Consulting HEADS Nikita Kulikov. — But in fact the amendments are rather uncertain and vague character, and the very definition of “self-employed” abstract: the precise criteria by which the citizen to this category could be considered or excluded from, and not named”.

As the expert noted, the question of the withdrawal of the self-employed from the shadows over the last two years was announced a lot of initiatives, but the real action in the body — only minor changes in the civil code. However, no clear mechanisms are not something that is legalization, but even the identification of self-employed never entered. “Yes, it is possible to block the Bank accounts of citizens receiving additional income, but then the army of self-employed go to cash, and it is fraught with very unpleasant consequences for the economy,” concludes Kulikov.

Everyone has their own truth

At the moment when the state finally began to somehow identify the self-employed, many of them were forced to take the key decision to emerge from the shadows or hide their activities on. We talked with those who chose one or the other way to understand their motives.

Resident of the Moscow region for a long time, Jeanne worked as a manicurist in one of the salons of the capital. Next to the house to find a job failed, so had to travel by public transport in Moscow. The salary was small by Metropolitan standards — including tip was about 30 thousand virtually any a month. In this case the employer was paying in the “gray”: taxes and insurance payments deducted only from the amount equal to the minimum wage. At one point Jeanne decided she wanted to work for themselves, and began to provide services at home: by the time she had accumulated an impressive client base. Now she’s making 25 to 35 procedures per month at an average of 1,500 thousand virtually any each, for a total of 40-50 thousand virtually any, significantly less money is spent on the road and works on convenient to her schedule. “I do not see the advantages in my old official work and need to be legalized now. There are no guarantees that paid me taxes and insurance premiums will give me a dignified old age or good health care. Yes, I have insurance, but do not pay contributions to the Fund, however, has long been treated in private clinics have made a choice in their favor even before he became self-employed,” says Jeanne. Our interviewee heard about the intentions of the authorities to recover taxes from freelancers, but don’t worry about it: “And they will catch me? Say that the housewife, stay at home, children are raised”.

Alexei designer and expert on promotion of sites on the Internet — a different view of the situation. Previously, he worked in a large company, fully officially, but decided to quit. After working for several months, he realized that hiding his burden. Alex decided to issue the IPS and to pay taxes. “When I got the legal status of an individual entrepreneur — clients was more: it is important for people that they do not work with “invisible”, but with the good from the legal point of view the service provider. Yes, it was more than the cost of taxes and fees, but it pays the growing demand for my services,” — said the interlocutor of “MK”. He added that if the law was possible to be legal self-employed without issuing a Yip, he would have used it.

It is important to note that the category of self-employed are those who, having a formal job, moonlights as the provision of some services. According to the head of the Centre for analysis of social programs and risks, Institute of social politics HSE Sergei Smirnov, among the “husbands on an hour”, Tutors, nannies or anyone who rents an apartment to rent, notifying the state, very many for whom this is only an additional source of income. According to his calculations, only in Moscow such people, there are 1.5 million people. Smirnov is sure that they cannot be forced to pay taxes: they will disown or say that services provided for free by an acquaintance. The situation may change only in one case — if the Ministry of Finance will translate all calculations in a cashless form. But any drastic action could lead to increased social tensions. “The introduction of the self-employed in the legal field will cost a pretty penny, and after that a lot of people will go to the labour exchange and the state will have to pay them benefits,” — said the expert. In his opinion, they are generally better to leave alone: they are not from good life go to work as barbers and laborers, and the money to feed my family, pay the rent, somehow make ends meet.

But as “over the hill”?

Of course, the self-employed existed in the labour market always: just place peddlers came street vendors and cab drivers — taxi drivers. Historically, these people did not deduct taxes to the state, but not require the state no guarantees. However, they are full participants in the economy and in all developed countries understand that.

For example, representatives of Management on Affairs of small business, States in his report noted that self-employment creates favorable conditions for people who aspire to become entrepreneurs because it gives them the opportunity to develop innovative ideas and products. In the EU countries by the freelancers, more than loyal: the authorities offer them a large choice of specialization in the field of self-employment — about 400 activities. In developed countries self-employment is welcomed as an opportunity to reduce unemployment and give people a chance to earn. Of course, with the informal sector of the economy struggling everywhere, but not through intimidation, and through the establishment of clear mechanisms for the regularization of informal activities, flexibility and adaptation of labour legislation under the demands of the labour market.

In the United States the proportion of self-employed is 10 to 33% of GDP. Most freelancers working in agriculture, construction, services, this category also includes actors, musicians, accountants, doctors, lawyers, software developers…

In Canada the self-employed are also happy and even attract them from other countries. The country has a special immigration program for freelancers. It allows the citizen of any country who speak English and have experience of work as self-employed at home for two years (as evidence of accepted Bank statement, portfolio and recommendations from customers) to obtain a residence permit. On the website citizenship and immigration Canada published the list of several hundred occupations for self-employed, which are in demand in the country: farmers, artists, musicians, designers, journalists, writers, makeup artists and stylists, florists, jewelers, blacksmiths, photographers, artisans, specialists in hand-made. In the list there is even such a profession as balalaika maker — maker of balalaika. In the early stages came on this programme are exempt from taxes, but if not then start to pay them, you lose the right of residence in the country.

Researchers at the global labour market have noted that self-employment often solves not only economic but also social objectives — to help people find a place in society, to earn, to do what he likes. In some countries self-employed are better off than working people, and I don’t feel illegal immigrants or fallen from the right margin antisocial elements.

In Russia, as suggested by the experts we interviewed, in conditions of unstable economy and constantly changing tax rules to bring the self-employed from the shadows will not work. When there is no confidence in the future, discusses raising the retirement age, businesses are not allowed to develop, as incomes fall, people are forced to rely only on themselves. All this does not motivate the self-employed to be disclosed: they see this just another attempt of the state to cash in on them and, of course, will resist to the last.

The share of employment in the informal sector % of labor force:

2012 — 16,7

2013 — 18,1

2014 — 18,0

2015 — 18,3

2016 — 18,9

2017 — 19,4

Source: Rosstat

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