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President of Russia Vladimir Putin: Good afternoon. Please.

Mr Yegorov, I have reviewed the materials. Over the ten months of this year, the Russian budget has received almost 46…

Head of the Federal Taxation Service Daniil Yegorov: Almost 46 trillion rubles.

Vladimir Putin: Forty-six trillion rubles. That is some 20 percent more than in the same period last year, is that correct?

Daniil Yegorov: Yes, that is correct. This is eight trillion rubles more in revenues than last year. This amount includes both budgetary and non-budgetary funds. The federal budget has shown perhaps the best result, with revenues growing by almost 30 percent. The situation around hydrocarbons certainly contributed to this outcome.

However, when it comes to non-oil and gas revenues…

Vladimir Putin: Some seventeen percent?

Daniil Yegorov: Even 20. Twenty-one percent, to be precise. That is a decent result, at least for now. We plan to maintain this rate until the end of the year, earning another eight trillion rubles. Our goal is to achieve 55.6 trillion across the entire budget, the entire budgetary system and, naturally, to achieve all budgetary goals.

I also think it is important to note that things are quite good with personal income tax – this is basically made up of the Russian citizens’ incomes.

Additionally, the value-added tax has shown a 22-percent increase. The sales tax has also grown by 22 percent, coincidentally. There is a correlation because income is related to consumption and VAT is a tax on consumption.

As for the sales tax, if you will allow me, I would like to point out a few important things. Our retail sector is changing very significantly, with many e-commerce platforms emerging. When we initiated the cash register reform, only six percent of sales companies operated online. Now, their share has reached 42 percent, including major companies.

Vladimir Putin: Online?

Daniil Yegorov: Yes, they operate using remote delivery.

Vladimir Putin: The revenues are multiplying, correct?

Daniil Yegorov: Yes, they are multiplying. We are witnessing drastic shifts in the market.

I believe it is of paramount importance that over 60 percent of marketplaces are comprised of small enterprises. Essentially, they have evolved into an infrastructure providing small businesses with access to demand.

Vladimir Putin: Has the market opened for them?

Daniil Yegorov: Indeed.

We can discuss the organisational structure of the system; naturally, it requires analysis and fine-tuning. Nevertheless, the certainty of its exponential growth is indisputable, Mr President.

This is why I must express gratitude for your endorsement of the legislation which will render our simplified automated tax system available as an option to all regions starting next year.

What does this entail? It is a system wherein it is not the taxpayers who complete the returns; rather, we undertake this task on their behalf. We gather all pertinent data from the banking sector and all online data from cash registers, process it, and provide the taxpayers with a pre-filled return. They have the option to amend our entries or to concur with the data we present.

Fortunately, everything is already finely tuned, with taxpayers making virtually no amendments, which indicates that our data is consistent. Consequently, this opportunity is now extended to all regions. Previously limited to four pioneer regions, all regions may now choose to operate under this framework. This applies to the automated system, which, like all taxes now, is predicated on our unified tax account.

I reported to you last year that it was a challenging reform, one of the most significant reforms we have undertaken.

Vladimir Putin: Discipline improved instantaneously, did it not?

Daniil Yegorov: Indeed, discipline has improved. I would describe it as a seismic shift.

Vladimir Putin: And what about the number of debtors?

Daniil Yegorov: It has halved, Mr President. The number of debtors has decreased by 50 percent nationwide. This means millions of individuals no longer owe debts to us, as they previously had liabilities scattered across various cells of the budgetary system, which we now manage centrally. A reduction of fifty percent, essentially halving the number, translates to over 20 million payers who are no longer in debt.

Furthermore, this reduction means we do not impose interim measures, such as suspending operations on accounts, which are particularly burdensome for individuals and businesses. We also refrain from initiating court proceedings. The volume of documents submitted to the courts has been reduced by nearly three million within a year – a decrease of three million documents produced for the judicial system.

Vladimir Putin: Yes, and the judicial system is not overloaded.

Daniil Yegorov: This is very important; they should not be overwhelmed and should work with documents that are of essence.

When we reduce the volume of cases, I believe, it benefits everyone, including taxpayers. For instance, court bailiffs will have to process 3.5 million fewer documents, which means fewer property seizures. Our colleagues are currently struggling to manage all this property. I believe we have made significant reductions in these volumes.

Finally, I would like to emphasise that all the technologies and innovations we propose are not improvised domestic solutions but are based on our assessment of global trends. Thank you very much for supporting our work at BRICS because we and our colleagues…

Vladimir Putin: … have signed the relevant document.

Daniil Yegorov: Thank you very much. I truly believe this is very important.

Without delving into details about the scale of infrastructure we plan, I think many people will be particularly interested in one aspect. We have agreed to exchange information regarding issues and problems faced by our taxpayers in relations between our countries.

Any Russian company operating in China, India, South Africa, or elsewhere can request assistance regarding any specific jurisdiction through us, rather than on its own. Our communication networks also enable us to address taxpayer issues at a significantly higher level.

We are consolidating all this information on a single Q&A platform, effectively creating a network of tax administrations. This network will facilitate foreign economic activities and enhance operations in BRICS countries. I believe this will prove to be quite beneficial.

Vladimir Putin: Thank you.

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