The President of the Union of businessmen and tenants of Russia Andrey Bunich believes that the fight against shadow turnover in Russian markets in which, presumably, are used cryptocurrency, will only lead to a deterioration of the situation for domestic business.
We will remind that else in April of 2018, the head of the Department of financial monitoring and currency control of the Central Bank Yuri Polupanov said that the turnover of the largest Metropolitan markets is around 600 billion roubles in a month (10 billion USD).
Speaking at the Thomson Reuters forum, Polupanov reported that, according to the Bank, a large part of this amount to the Bank account is not credited, but the funds are purchased and transferred abroad cryptocurrency. According to him, the retailers have become “practically the pioneers and leaders in the cryptocurrency market”: the majority of merchants from China take their profits in crypto currencies and in the domestic market to exchange them for yuan. Regulators also found that wholesale markets are already working crypto currency exchange. Polupanov explained that some of them are registered as providers of financial services.
At the end of January of 2019, the head of the Central Bank Elvira Nabiullina has addressed to President Putin with a letter in which he disclosed details of funding for “gray” import and transfer of funds abroad via the largest Russian markets. Reacting to the appeal, in late February, Putin instructed the government and the FSB to work out measures on combating the shadow turnover of cash and goods in the markets.
Commenting on the recent searches in the Moscow shopping centers and instructions of Putin, Andrei Bunich said:
“I don’t think that the right to turn off the cash flow by any means. This, of course, on paper looks nice – payments come out of the shadows, taxes will be collected more. In fact, it is unknown whether more tax revenue if we all trade only with cash registers.
First of all, it would increase the cost of virtually all goods, plus the strengthening of the monopoly in a more strict control will be able to survive only larger structures. In the end, prices will rise as the degree of discontent in society.
Notice the demand for cash in Russia – a consequence of the fact that the country’s financial system is not working as it should. She monopolized, because it consists entirely of state-owned banks, bureaucratic, and does not provide financing business. In Russia, the five largest state-owned banks control more than 70% of banking assets. But even this is not enough, and they strive to subjugate all available areas. And pension funds and non-Bank lending, and now the construction trade.”
To a question on why in Russia prefer cash, Bunich said:
“Cash prefer restaurants, retail outlets – because the financial system monopolisieren. Because of this, I think a business is always hanging the threat that the Bank can recognize “suspicious” at any time to arrest a “suspect” payments, even in small amounts – block.
Add to this that the Ministry of Finance comes up with more and more taxes, non-tax fees and fines – and you get a total system pressure of business, which paralyzes all life.
Nabiullina in a letter to Putin, in fact, calls to restore order. But the problem is that total control simultaneously complicate — especially in crisis – the work of virtually all commercial enterprises.
I think before you tighten the screws, the government would do well to understand: why people are willing to pay 15% for cash withdrawals? This readiness indicates the degree of confidence of businessmen in the financial system of the Russian Federation and to the Russian economy as a whole. In other countries, let me remind you, this is not a problem. There is no difference between cash and non-cash, and in some European countries, the turnover of cash is generally reduced to almost zero. Foreigners do not understand, why you need to pay non-cash money into cash.
But Russia’s thirst for cash is very pronounced, and it means that the economy does not work. Means to produce something is only one way – in the bypass state. Moreover, the state does not simply takes away too much – these are selected the money goes into the pockets of senior officials, and immediately removed from the country.
I think, if Russian financial system was healthier, and the market system is established, the business he would prefer to pay taxes to be honest.”
Commenting on the possible consequences of strengthening the fight against shadow turnover of cash, the head of the Union of businessmen and tenants of Russia summed up:
“I fear that the current desire to crush in the underground economy will lead to a paralysis not only in trade but in other industries. Interfering with the business of doing something, the government playing into the hands of monopolists. And this clearly leads to higher prices, elimination of competition and the weakening of the stimulus to growth”.
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