Prohibition No. xxx. The private entrepreneur is under attack again. Only one warrior in the field

It is no secret that not only in retail, but also in the IT business, a form of doing business under the name “Private Entrepreneur” is widely used. Not so long ago, a heavy blow was dealt to this class of businessmen, which radically increased the level of taxes paid. The result was a significant reduction in the population of this "beast" in our Taiga. However, this was not enough.
Strange as it may seem, the Ombudsman for Entrepreneurs under the President Boris Titov organized a new attack on the self-employed, whom the position obliges entrepreneurs to protect.
Read more about why entrepreneurs are so attractive to those who start their IT business and what exactly the highest-ranking “business advocate” in Russia offers under the cut.

According to the Federal Tax Service, in April 2015 there were 3.46 million entrepreneurs in Russia, more than small and micro enterprises combined (2.35 million). The reason for the popularity of the form of IP in Russia is largely in the simplified reporting and taxation procedure: IP may not keep accounting and balance sheets. Individual entrepreneurs pay lesser fines than legal entities. The popularity of IP status is primarily high because of the simplicity of obtaining and eliminating it, taking into account our extremely complicated legislation: you do not need to write a charter, define and divide shares, keep on staff or involve accountants and personnel officers. Finally, IPs rarely become the target of raiders. Not surprisingly, this form of entrepreneurship is often chosen by freelancers, programmers, and novice IT teams.
IP is the most dynamic and flexible sector of the economy, quickly responding to changes in the labor market and able to mitigate the impact of the crisis. After an increase in social contributions in 2013, the number of individual entrepreneurs, according to the Federal Tax Service, decreased from 4 million in January 2013 to 3.4 million in January 2014 (0.9 million private individuals were liquidated). The state understands the propensity of entrepreneurs to informally conduct business as a propensity to evade taxes and obligations to employees and is trying to bring them “into the light”. But the officials do not eliminate the reasons that make entrepreneurs work informally: the difficulty of registering and re-registering, hiring and dismissing workers, high taxes and bureaucratic pressure, weak property guarantees.
Presidential Ombudsman for Entrepreneurs Boris Titov proposed the abolition of IP as a rudiment of the 1990s, retaining this form only for those who do not have wage earners , Rossiyskaya Gazeta reports.

As a result, Russia may lose one of the most widespread and enduring types of business - individual entrepreneurs (entrepreneurs) hiring workers. The initiative of the defender of the rights of businessmen looks at least strange. Apparently, in this way, the state decided to fight the too independent and active part of society and the problem of tracking their income and, most importantly, expenses , but the last goal is unlikely to be achieved as a result.
Apparently our wonderful business ombudsman is not aware that entrepreneurs using hired labor have no significant advantages over small businesses today. Such individual entrepreneurs pay contributions to the Pension and other funds on an equal basis with legal entities, but the main thing is that in the event of default or bankruptcy, the individual entrepreneur risks losing everything, even his apartment and personal belongings, and the liability of the LLC is limited only by the authorized capital. In the case of criminal liability, the entrepreneur himself is at risk of being imprisoned, and not the “zits-chairman” or accountant.

The expected outcome of the new prohibition initiative is that some of the entrepreneurs and their employees (4.6 million people, according to Rosstat in 2013) will become official unemployed or will go into the shadows. And government officials will be surprised at the growth of the shadow sector and resent that millions of people are “busy with what’s unknown.”
An attempt to transfer IP to MP will lead to the flourishing of the shadow sector. Economist Alexander Chepurenko believes that individual business will largely turn into illegal. A new change in the rules of the game will destroy an entire layer of entrepreneurs who will not be associated with the registration of an LLC and the associated bureaucratic burden.



The desire to abolish IP status for businessmen hiring workers recalls the story with the Soviet slogan “eliminating the kulaks as a class”, where the key sign of the kulak was just hiring workers. In the late 1920s - early 1930s. this led to the enlistment of millions of peasant families in the kulaks and “podkulakniks”. Soviet and party workers considered hiring even the mutual assistance of neighbors and fellow villagers in rural and other jobs for a nominal fee or treat.