First Benefits for Businesses Affected by Coronavirus Approved in the Smolensk Region

Deputies of the Smolensk Regional Duma promoted the legislative initiatives of the Governor Alexey Ostrovsky to take measures aimed at minimizing the regional economy loss due to the effects of coronavirus. Amendments to the regional legislation are aimed at reducing the tax rate for entrepreneurs operating in the most affected areas under coronavirus spreading. This allows decreasing a tax burden and supporting the business under current difficult conditions.

In particular, the adopted amendments to the regional law establish from January 1, 2020 a reduced rate of 1% for taxpayers operating a simplified tax system, if the tax base is income, and working in the most affected areas (catering, pre-school education, sports, tourist and sanatorium activities, hotels, beauty salons, hairdressers and others).

In addition, there have been made amendments to Annex 1 to the Regional Law “On the Introduction of the Patent Taxation System and its Application by Individual Entrepreneurs in the Territory of the Smolensk Region”. They are aimed at decreasing from January 1, 2020 a potential annual income volume, which is earned by an individual entrepreneur, of 30% for types of business activities most affected by coronavirus. It is important to note that the potential annual income amount for an individual entrepreneur is established independently of the number of employees. It has been done for maximal job conservation.