According to the official declaration for 2017, the income of the Minister of Finance Anton Siluanov amounted to 25.1 million rubles. At the same time, the minister is only in 7th place in his department. The question arises, why does the state pay officials such money?
Structure of the Ministry of Finance
The Ministry of Finance of the Russian Federation has 5 main divisions:
- Federal Tax Service;
- Federal Insurance Supervision Service;
- Federal Service for Financial and Budgetary Supervision;
- Federal Financial Monitoring Service;
- Federal Treasury.
Customs officers are also monitored: how payments and duties are charged and collected, the cost of goods and vehicles is determined.
Powers of the Ministry of Finance
From the point of view of law, the Ministry of Finance of the Russian Federation belongs to the executive branch. In fact, this is the chief treasurer of Russia, whose main task is to find and properly distribute the available resources to fulfill the promises of the legislature.
The powers of the Ministry of Finance are limited to two functions:
- Introduction to the government of the Russian Federation of draft Federal laws, regulations signed by the President of the Russian Federation and other documents on which the government must decide.
- Adoption of certain legal acts: this is the report of the Ministry of Finance on the use of budgetary and non-budgetary funds of the Russian Federation, the form and procedure for filling out tax returns, and other highly specialized documents.
Employees of this department work out budgetary policy and conduct financial audits. In addition, the powers of the Ministry of Finance:
- determine cases when it is mandatory to ensure the payment of customs fees by insurance contracts;
- set the maximum amount of the bank guarantee and for each bank;
- determine procedures and rules for inclusion of organizations in the register of insurers.
Rights of employees of the Ministry of Finance
To exercise their powers, Ministry staff:
- Request information within the competence of the Ministry of Finance.
- They independently establish insignia and reward their employees with them.
- Engage outside experts to address specific issues.
- Create groups and committees to discuss specific issues.
- Self-established media.
Nevertheless, the powers of the Ministry of Finance do not apply to the restriction of the rights and freedoms of citizens, as well as commercial and non-profit organizations.
Legislative framework forMinistry of Finance
The guidance documents for the Ministry of Finance are:
- Constitution of the Russian Federation;
- normative acts signed by the President of the Russian Federation;
- law on the Ministry of Finance;
- internal instructions.
Main activities of the Ministry of Finance in 2018
In the latest public report, the following areas of activity of the Ministry of Finance were named as priorities.
- Ensuring stability in a difficult way out of the crisis, changing the structure of the economy.
- Improve the business climate and develop a competitive environment through more efficient budget revenue management.
- Effective management of the expenditure side of the budget.
- Ensuring balanced development of regions.
Now let's consider each of them in three dimensions: the main tasks of the Ministry of Finance of the Russian Federation, the current situation and the prospects and results that the department itself plans to achieve by the end of 2018.
Ensuring stability in the difficult economic conditions of overcoming the crisis, changing the structure of the economy
Work in this direction was started by former Finance Minister Alexei Kudrin (pictured above). In 2018, an ambitious goal was set to achieve the following tasks:
- optimize budgeting and tax policy;
- prepare the federal budget for the next 3 years;
- prepare a plan to reform the taxsystems in order to ensure stable economic growth and create conditions for fair competition.
How are things now and what to expect in 2018?
In 2017, a number of measures have already been taken to address these challenges. Thus, the budgetary rules were legally fixed, which created the prerequisites for reducing the dependence of the economy on external conditions.
The Ministry of Finance has the authority to consolidate the budget and reduce the primary budget deficit to 1% of GDP.
At present, the economy is gradually coming out of the crisis. According to the current Minister of Finance Anton Siluanov (pictured below), we have become stronger and able to withstand external shocks. The main directions of the budget policy of the Ministry of Finance are based on this foundation.
The 2019-2021 budget takes into account the latest recommendations of the Ministry of Finance and assumes a reduction in the dependence of the economy on oil prices, an increase in the competitiveness of the real sector and a decrease in dependence on the external environment.
It is planned to reform the tax system, which will allow reaching stable economic growth. Currently, there are no prerequisites for business development in a fair competition.
This situation will try to change due to additional tax incentives. And the Ministry of Finance plans to take the funds for the reform from budget revenues.
Expected results for 2018:
- protect the economy from the influence of external factors;
- ensure sustainable and balanced growth.
Improve the business environment and develop a competitive environment through more efficient budget revenue management
In this direction, the Ministry of Finance has the following tasks:
- improve the efficiency of revenue management and prevent the growth of receivables;
- create conditions for reducing the shadow economy and returning capital to Russia.
Current situation and prospects
The introduction of new technologies and the formation of a single information space allow replenishing the budget without increasing the tax burden on the population. Such transparency creates conditions for increasing the attractiveness of investments and business. But the situation is just beginning to improve.
In 2018, a lot of work remains to be done in this direction. The implementation of the second stage of the program is planned, for which it is necessary to create a single mechanism for managing customs and tax payments.
And the formation of a national traceability system for goods based on completed declarations continues.
In 2017, the inventory of accumulated receivables on insurance premiums was completed. A number of measures have been implemented to increase the collection of payroll taxes. Thanks to these measures, approximately 70% of enterprises have come out of the shadows.
In 2018, it is necessary to form a regulatory framework for the international exchange of information and the fight against tax evasion. The second phase of the capital amnesty is also scheduled for 2018. This will allow us to return to our economy exportedfunds, and will also become an additional incentive for doing business in Russia.
How to improve the efficiency of tax collection?
To improve the efficiency of tax collection, the following measures are expected to be introduced:
- creating conditions for "whitewashing" the economy;
- stimulating the voluntary and timely payment of taxes and other fees;
- creating conditions for more efficient recovery;
- prevent bad debts.
To implement these measures, it will be necessary to increase the responsibility of audit organizations and auditors, switch to international principles for the exchange of information between audit companies and tax authorities, and adapt accounting standards to the realities of the digital economy.
Expected results for 2018:
- improve conditions for fair competition, reduce the share of the shadow economy and increase the amount of taxes collected;
- increase transparency and predictability of doing business in Russia;
- return capital withdrawn abroad to the Russian economy, increase the attractiveness of doing business in Russia;
- ensure the reliability and availability of financial information, increase the transparency of the formation of the budget revenues.
Effective budget management
In this direction, the following tasks have been set for the Ministry of Finance:
- create a new budget expenditure management system, make it more efficient through flexibility and an integrated approach;
- linkbudget with the state management strategy.
What is the work to do?
The following measures are being implemented to improve strategic effectiveness:
- active work is underway on a program to improve the efficiency of budget spending in 2019-2024;
- Standards and procedures for monitoring, recording and evaluating the effectiveness of tax incentives are being developed;
- a social contracting mechanism is being introduced in a number of constituent entities of the Russian Federation.
Also working on improving operational efficiency:
- approaches and criteria for the effectiveness of spending funds from the budget are being developed;
- government procurement is converted into electronic form;
- a new budget tracking concept is being developed;
- updating the criteria for justifying estimates;
- the list of cases where funds from the budget are provided “under the actual need” is expanding.
Officials are also working to increase control over budget spending:
- new accounting standards are being developed as part of the federal program for 2018;
- a new system for monitoring the quality of financial management is being implemented - a comprehensive audit of the Ministry of Finance will be carried out: what auditors check and how they do it.
Expected results for 2018:
- strengthen control over the use of budgetary funds for their intended purpose;
- improve the quality of public services through the development of fair competition;
- increasetransparency and create free competition in public contracts;
- create a register of powers of federal executive bodies;
- improve the quality of financial management;
- increase the efficiency and speed of fulfillment of commitments on expenditures from the budget.
Ensuring balanced development of regions
For 2018, the Ministry of Finance has the following tasks:
- increase the predictability of the amount of funds needed to support the regions and allocated from extrabudgetary funds;
- equalize the financial capabilities of the regions, reduce the debt burden on the constituent entities of the Russian Federation;
- prepare proposals for fine-tuning the institution of CGTs (consolidated groups of taxpayers).
Current position and prospects:
In 2017, the following measures were taken in this direction:
- restructured regions' debt on budget loans;
- conditions have been created to stabilize and reduce the debt burden.
In 2018, we will continue to work in this direction and implement the following measures:
- improving the efficiency and transparency of targeted intergovernmental transfers;
- fixing the standards for the maintenance of public authorities;
- reducing regulation at the federal level of the powers of state authorities and local governments;
- tightening control over the program of financial recovery of subjects of the Russian Federation with a high level of debt burden;
- carrying outcomprehensive analysis of the Institute of Consolidated Taxpayer Groups.
Expected results for 2018:
- increase the level of predictability of transfers;
- create conditions to ensure a balanced debt policy pursued by the constituent entities of the Russian Federation;
- develop and implement a set of measures for the fair distribution of tax revenues between the constituent entities of the Russian Federation.
Summarize
According to Anton Siluanov, in 2017 the country's economy entered the trajectory of sustainable growth. The crisis of 2014-2016 was the most powerful in the last 50 years. Nevertheless, the structure of the economy tends to recover and is much less influenced by external conditions.
There are quite a few issues that have yet to be resolved. We will have to overcome all the inhibitory factors: structural constraints, unfavorable business climate. Equally important is financial transparency.
These are the main priorities for the next 3-5 years. Let's hope that the Ministry of Finance will be able to use the existing foundation and build on it a strong framework for a modern, efficient and competitive economy.
