Supporting entrepreneurship and small business — comment CERR

Supporting entrepreneurship and small business — comment CERR

The Presidential Address also puts forward a number of important proposals to support entrepreneurship and small business, as well as measures to mitigate the consequences of the crisis.

Measures to tackle the pandemic crisis will continue next year. In particular:

- Preferences given for sectors like tourism, transport and public catering will be extended for an additional one year

- It is proposed to extend the tax period for land and property taxes of 20,000 entrepreneurs, worth 400 billion sums for another year;

- As a result of the introduction of 30% advance payments up to $1 billion for public procurement transactions, entrepreneurs will have an additional working capital of up to 1.5 trillion sums;

- 6 trillion sums will be allocated for "family entrepreneurship " program in concessional terms.

Today there is a consensus among economists as to intervention of state in the economy: the State should protect the private property rights, conduct countercyclical policies in times of crisis, establish "rules of the game" and create a mechanism for the effective regulation of market participants.

In this sense, measures in support of business and entrepreneurship listed by the President in his Message is aimed at further improving the above-mentioned tasks of the State.

As the President noted, the most important point is to ensure the inviolability of private property as the most important task of State bodies at all levels.

Indeed, as the American economist Armen Alchian said, as an economy develops, the need for property rights increases. At the same time, most growth studies show that there is a close link between protecting private property rights and economic development. In this regard, as another important step to secure the rights of private property, the President proposes to empower the Business Ombudsman to bring executives and officials of state authorities to administrative responsibility.

It is no secret that high bureaucracy is one of the biggest obstacles to the development of business and entrepreneurship. Therefore, in 2021 105 types of licenses and permits will be canceled and for 115 of them the procedures will be simplified. Also, about 5 thousand legal documents related to entrepreneurial activity will be simplified, and a unified Entrepreneurial Code will be adopted.

It is noteworthy that the moratorium on inspections of economic entities announced by the President four years ago, which shows its good results, is proposed to be extended for another year.

the Center for Economic Research and Reform

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