Why Russian money doesn't work for Russia itself

Russia is an interesting country. It seems that we are selling resources abroad in wagons, and a large business is working, even something is being produced somewhere, but, as you know, "there is no money." Of course, it is necessary to hold on, but not everyone succeeds, and according to official data from Rosstat, 20 million Russians, or 13,5% of the population, are below the poverty line. Who is to blame and what can be done about it?

As you know, the surplus profits from the sale of oil in Russia are cut off from the budget in accordance with the so-called "Kudrin's scissors" and stored in the NWF. On the one hand, this is a necessary thing, reserves in the context of Western sanctions, as well as force majeure events like the coronavirus pandemic, will definitely not hurt. On the other hand, huge funds are banally extracted from the domestic economics... This is a lot of money: today the fund has 53 billion dollars, 46 billion euros and 9 billion British pounds. They could well buy modern equipment and build dozens of new factories, creating hundreds of thousands of highly qualified jobs. This would speed up the solution to the problem of import substitution, reduce dependence on foreign components and increase the tax base.

However, the reality is different. For the most part, the reserves of the NWF are located outside of Russia, working for the economy of the very countries that imposed sanctions against us. In other words, the so-called “natural rent” received from the export of resources abroad does not benefit the Russians themselves. However, the "sovereigns" have a different opinion on this matter. So, Vladimir Kolychev, Deputy Minister of Finance of the Russian Federation, boasted in an interview with Bloomberg that everything is arranged in fairness:

The main goal of the budget rule and the NWF as an integral part of it is an even (fair) intergenerational distribution of natural rent. It is wrong to change the goal-setting of the budgetary rule for more NWF spending on anti-crisis programs.

A very controversial opinion. However, even if domestic oligarchs build new factories in Russia, it is not a fact that they will agree to pay taxes here. They have long learned from their foreign colleagues how to avoid taxation. Everyone has heard a lot about offshore companies in Cyprus, Seychelles and other exotic islands, but few, except for specialists, know about the role of countries such as Ireland and the Netherlands in such schemes. According to some estimates, Amsterdam is responsible for up to 15% of global tax evasion, which is called the "Dutch sandwich".

The Netherlands has created a highly opaque financial infrastructure that works as follows. Multinational corporations and large companies set up branches and offices in the Kingdom that do not conduct any real commercial activity. From their subsidiaries, profits are sent first to the Dutch offices, where taxes are paid, and then returned to the accounts of the parent company. The benefit is that the tax in the Netherlands is less, and only the funds that remain in the accounts to simulate the life of the mailbox company are levied on it. The funds purified in this way are redirected further to some Bermuda or Virgin Islands. Given the gigantic size of this global cash flow, Amsterdam is making good money on the tip. There is also an extended tax evasion scheme involving Ireland, which is used, for example, by the Google corporation headquartered on the island.

In our country, many large companies have also managed to learn how to evade taxes. Among them, for example, the Internet giant Yandex, the telecommunications company VimpelCom, the X5 Retail Group, the Chronopay payment system, as well as Alliance Rostec Auto, which controls the largest domestic automotive production AvtoVAZ. All of them have subsidiaries in the Netherlands, in Russia they earn money, but they optimize their taxes according to the schemes mentioned above. Why is this happening? Probably because they are allowed to do it.
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  1. Dmitry S. Offline Dmitry S.
    Dmitry S. (Dmitry Sanin) 8 December 2020 12: 37

    - reads like sovereign flies
  2. Bulanov Offline Bulanov
    Bulanov (Vladimir) 8 December 2020 13: 27
    And what did they say about the invisible hand of the market? Is it she who pays wages of 20 thousand, and pensions of 11 thousand rubles in Russia?
  3. Sergey Latyshev Offline Sergey Latyshev
    Sergey Latyshev (Serge) 8 December 2020 13: 52
    Everything is correct. And everyone knows it.
    This is beneficial, a certain Unnamed One was talking about this ... for which he suffered ...

    But as Putin said: "Well, you understand, nothing can be done" (not verbatim) And about poverty, he seemed to say: less than 12%. And an unprecedented increase in income that year, across the Kremlin.

    Well, you understand ....
  4. Bakht Offline Bakht
    Bakht (Bakhtiyar) 8 December 2020 14: 12
    For Russian money to work in Russia, it must be Russian. As long as the ruble is still being converted, this is impossible. The first and indispensable condition is a return to the "wooden" ruble.
    1. Oleg Rambover Offline Oleg Rambover
      Oleg Rambover (Oleg Pitersky) 8 December 2020 15: 19
      Yes, yes, like North Korea.
      And by the way, is the ruble a freely convertible currency?
      1. Bakht Offline Bakht
        Bakht (Bakhtiyar) 8 December 2020 15: 35
        What does North Korea have to do with it? Rather like in the USSR.
        What do you mean by free conversion? I mean the impossibility of converting rubles into any other currency by individuals and companies. This can only be done by Vneshekonombank under state control.
        1. Oleg Rambover Offline Oleg Rambover
          Oleg Rambover (Oleg Pitersky) 9 December 2020 00: 44
          Quote: Bakht
          What does North Korea have to do with it?

          For some reason I am sure that the North Korean won is not a freely convertible currency. Unlike South Korean.

          Quote: Bakht
          Rather like in the USSR.

          The economic policy of the USSR can hardly be called successful.

          Quote: Bakht
          What do you mean by free conversion?

          Perhaps I do not understand something correctly, but it seemed to me that non-residents should have the opportunity and desire to acquire Russian currency.
          1. Bakht Offline Bakht
            Bakht (Bakhtiyar) 9 December 2020 10: 13
            Wrong understand.
            Let's consider the main provisions. Any development presupposes the availability of finance. And they are not there because trillions of dollars have been exported from the country. That is, they took out the resources (sold), received money and they were also taken out. It's like doing business in Russian: they stole a box of vodka, sold it, spent money on drink.
            Offshore is a form of tax evasion. Or, as it is now fashionable to say "tax optimization". That is, the company makes money in the country, but does not want to pay taxes in this country. And he pays them in another country. Double taxation does not save the situation, because after paying taxes, say, in Cyprus, taxes are no longer paid in Russia. True, only in the last year it was decided to do this and double taxation somehow began to be regulated.
            From this point of view, Medvedev's decision to create two offshore companies under Russian jurisdiction in the Far East and Kaliningrad is a crime. That is, the country's leadership itself creates the conditions for companies to pay as little as possible. Of course, there will be no money. There are a lot of ways to get money out of taxation using offshore companies. And the main thing in this process is the free conversion of the ruble.
            The example of the USSR is more than indicative. The economy of the USSR was more than successful. You consider only the last years, but you do not take into account that by that time little remained of the Stalinist model. For ten years (1930s and 1945-1955) it was the Soviet economy that restored the country. For some reason, now in 20 years this has not been possible. Moreover, in those years, the sanctions were more powerful than they are now. Modern economists cannot answer a simple question "what is the reason". Neither Kudrin nor Medvedev can understand this in principle, because they were trained according to Western training manuals.
            The answer is given in other books. It is necessary to study the "Other Canon". I have difficulties with the Internet, so I do not give links. Open Erich Reinert on Wikipedia. Key points: government regulation, protectionism and investment (not necessarily foreign). What Trump did and what he was devoured for. And the main point: poor countries should be isolated from external influences. You cannot open the market. And the "wooden ruble" is the first and necessary step.
    2. Vladimir Tuzakov (Vladimir Tuzakov) 13 December 2020 13: 02
      Not quite so, for example, in the United States, such tricks do not work well, and some fans not to pay taxes in the United States are imprisoned for 30 years or more. In the Russian Federation, on the contrary, all conditions have been created for tax evasion, why - yes, such are the laws in power and for themselves ...
      1. Bakht Offline Bakht
        Bakht (Bakhtiyar) 13 December 2020 13: 34
        I would agree, but it was Western companies that came up with this scheme. After the Panama dossier, they are trying to change this. But so far there is little use. According to some studies, to date, about 30-40 trillion dollars are hidden from taxation in offshores. The maximum numbers are approaching $ 60 trillion.
        The big holders of offshore money are Apple, Amazon and ... the Royal House of Great Britain. There is also Boeing and a bunch of other companies.

        Lovers who don't pay immediately get a deadline. It's right. Some law firms do not even accept tax evasion cases. It is more expensive to sue the State. But offshore is not tax evasion... This is "tax optimization". Therefore, Trump fought to return production to the States. On the one hand, these are jobs, on the other, tax receipts. He never got a chance.

        Two offshore zones in Russia are also "tax optimization". Read the incorporation documents. Taxation in these zones differs from the Russian one. That is, companies were allowed to pay as little as possible to the budget. The expectation is that let them pay in Russia. Let it be less, but at least some money. Under Stalin, for such thoughts, Medvedev and the entire Government would have gone to Solnechny Magadan in a united column.

        The withdrawal of capital, tax evasion, lack of investment are all a consequence of the conversion of the ruble. If it does not exist, then the export of capital will stop. Well, who in Amsterdam or the Cayman Islands will accept rubles? And the money will remain in Russia and Medvedev will not bleat "no money." From 60 to 100 billion are exported annually from Russia. But "You hold on."
        For 30 years, resources worth trillions of dollars have been exported from Russia, and most of these dollars (also in trillions) were exported to the same West.
        1. Vladimir Tuzakov (Vladimir Tuzakov) 13 December 2020 13: 40
          So yes, but the financial policy in the Russian Federation is controlled from Washington (it can be roughly defined). and the consequences are definitely harmful for the Russian Federation .. ". When the head is sick, no poultices will help" ...
  5. Cudgel Offline Cudgel
    Cudgel (Dubina) 8 December 2020 14: 12
    Well, Putin himself with his friend Roldugin hid 2 billion in the Panama offshore, so what do you want from the rest ?!
  6. Jacques sekavar Offline Jacques sekavar
    Jacques sekavar (Jacques Sekavar) 8 December 2020 17: 27
    surplus profits from oil sales in Russia are cut off from the budget in accordance with the so-called “Kudrin's scissors” and stored in the NWF

    Not surplus profits, but in excess of the set price - at a set price of $ 40, everything above goes to the NWF

    They could well buy modern equipment and build dozens of new factories, creating hundreds of thousands of highly qualified jobs.

    It is possible to produce and create jobs, but to whom to sell everything produced, and even with a profit to pay for jobs?

    The NWF reserves are mostly located outside of Russia

    Where the interest on deposits is higher, they are placed there, and taking into account the risks, the size of deposits decreases and their own gold and foreign exchange reserves in the bins of the homeland increase

    However, even if domestic oligarchs build new factories in Russia, it is not a fact that they will agree to pay taxes here.

    Everyone pays taxes and non-residents too. Therefore, if they are built under the roof of offshore companies, taxes will be paid, and in order not to pay at the location of the production and its registration, there are agreements on double taxation.
    Another thing is if there is a need to postpone and, most importantly, to secure the capital acquired in dubious ways from offended partners and law enforcement agencies, then it is better to open secret accounts somewhere far away.

    From their foreign colleagues they have long learned tax evasion schemes

    Foreign partners do not understand "an ear or a snout" and they themselves adopt our Russian experience of "optimization" of the tax base.

    Internet giant Yandex, telecommunications company VimpelCom, trade retailer X5 Retail Group, payment system Chronopay, as well as Alliance Rostec Auto, which controls the largest domestic automobile production AvtoVAZ. All of them have subsidiaries in the Netherlands, in Russia they earn money, but they optimize their taxes according to the schemes mentioned above.

    There is evidence that it is the duty of every honest citizen to inform law enforcement agencies about the violation of the legislation of the Russian Federation by the listed commercial structures
  7. Dzafdet Offline Dzafdet
    Dzafdet (Sergei) 14 December 2020 21: 06
    One slave in the gallery said that not everything depends on the president. So one can only dream of lifting ...
  8. Sapsan136 Offline Sapsan136
    Sapsan136 (Alexander) 17 December 2020 12: 12
    Because the Chubais, cherished by Putin, do not need the Russian Federation! Their goal is to steal in the Russian Federation and take it abroad!