Ministry of Economic Development has denied the tourist business tax breaks – Proceedings

Ministry of Economic Development has denied the tourist business tax breaks – Proceedings

Economic Development. Photo: Lime / Vladimir Suvorov

The Ministry of Economic Development (Economic Development) opposed the granting of tax incentives tourism business in the Far East. Position agencies represented in prison for prepared by the Ministry of Culture (Ministry of Culture) bill, suggesting preference for the development of tourism in this region (copy of the conclusion is in “Izvestia»).

In the fall of 2013 a government commission on the socio-economic development of the Far East requested Minvostokrazvitiya, Ministry of Finance and the Ministry of Culture to decide the issue of tax incentives for tourism and recreational facilities and other facilities of the Far East of tourist infrastructure. By May of this year, the Ministry of Culture has published a bill which provides tax incentives to companies that belong to (the right of ownership, lease) turinfrastruktury objects. Among them are hotels, motels, as well as their constituent objects food, entertainment, etc.

For such companies, is expected to set lower rates of property tax (cut rates lower with the current 2.2% to 0.5%) and land tax (limit to be reduced from 1.5% to 0.5%), as well as the release of income tax (currently the rate is 20%). The bill provides the introduction of these changes to take effect from next year. According to the Ministry of Culture, falling tax revenues will then be offset by the expected increase in demand for agency travel services in the region.

Ministry of Economic Development to provide tax incentives tourism industry of the Far East were skeptical. The department “News” reported that the Ministry of Culture of the projected growth in demand for tourist services rendered is very optimistic in the current environment – this low quality of the services, high tariffs for transportation of tourists, the difficult investment climate for the development of tourism and other sectors.

In support of this conclusion is given in reference to the data of the international ranking of countries’ competitiveness in the tourism sector, published by the World Economic Forum in March 2009. It took Russia only 59th place out of 133 countries, despite the fact that its natural wealth is estimated at 5 th place, and objects of cultural heritage – the 9th. In addition, reminiscent of Economic Development, to improve the quality and availability of travel services in Russia approved by the federal program for the development of domestic tourism in the years 2011-2018 and “development of culture and tourism”, including routine, aimed at creating conditions for the development of domestic tourism. In this regard, it is believed in the ministry, in order to achieve the stated goals of the Ministry of Culture in the first place it is necessary to ensure the successful implementation of the activities of these programs.

Provision of tax incentives, according to the conclusion of the Ministry, should be considered as an additional incentive measures, the introduction of which is advisable after the tasks identified in the program. They suggest including awareness-raising campaigns, organization of tourist forums, exhibitions, subsidized interest on loans received by participants in public-private partnership in the field of tourism and others.

Partner “Nalogovik “Sergei Varlamov pointed out that in general tax incentives applied often enough, because it is one of the most effective measures for entrepreneurs, which increases their profits and urges a more active activities. For example, the Crimea was the VAT exemption, the same Far East and Trans-Baikal and Buryatia received incentives for investment and processing companies.

– were effectively tax incentives for IT-companies that helped qualitatively development of this sector in Russia. But the success of tax cuts is directly related to the demand for goods and services from companies receiving concessions. Therefore, tourism, such measures may not work as domestic tourism can not boast of great popularity – said Varlamov.

Partner of law firm “Nektorov, Saveliev and Partners” Yegor Batanov adds that now the key problems of the tourism industry of the Far East are associated with poor infrastructure and logistics, and these problems are proposed Ministry of Culture, the benefits can not decide. Passage of the bill, according to experts, can lead to some reduction in prices for travel services, however small that hardly affect the flow of tourists.

Commercial Director of the Tourist Portal DaTravel.com Elena Borisova agrees that this case more work “marketing sites” – the creation of a positive information field around the region with a lovely rare nature. According to the expert, for the development of local tourism need to cultivate the willingness of citizens to come to the region to admire the beauty of active rest. While there is no demand from tourists, says Borisov, no sense to reduce taxes.

– International experience in the development of domestic tourism shows that success brings national tourism advertising and the creation of a unique tourist product, which is often a national rationale, – the head of the center, “the public to think” Roman Terekhin. – For example, in the United States is widely used practice of creating local attractions (monuments, museums, festivals, fairs). Every state, city, something stands out, for example, where a monument to the biggest burger or a ball of yarn, Europe – thematic tourist products, such as gastronomic tours or tours devoted to a different time. International experience shows that domestic tourism develop activities involving celebrities.