OREANDA-NEWS. November 21, 2012.  During his visit, Prime Minister Dmitry Medvedev was shown a new model for tax inspection offices that employs state-of-the-art designs and the latest technology to better serve citizens. Tax offices will be equipped with information terminals that visitors will use to check their TINs and tax balance, verify contractor names and more.

The head of the Federal Taxation Service Mikhail Mishustin also showed Dmitry Medvedev a newly released iPad application that was designed by the service and can be used to submit online applications to incorporate a legal entity or a private entrepreneur.

In addition, the Prime Minister was shown how the automated GIS-based monitoring works. Mr Mishustin said that local tax authorities can use it to monitor the work of their employees in the field and the offices.

Later, Prime Minister Dmitry Medvedev spoke with staff of the Federal Taxation Service.

Transcript:

Dmitry Medvedev: Colleagues, friends, please accept my congratulations on your upcoming professional holiday. It turns out it was first marked 12 years ago. I don’t know how you celebrate it, but I assume that the procedure does not differ much from other professional holidays in Russia.

A few words about the business at hand. I won't say any platitudes about the importance of your work. It is obvious that money is money, and no state can live without it. No country can secure its existence without collecting taxes. This is why we are watching the operation of our tax system so closely, while your task is to ensure the collection of taxes in the required amount. As far as I know, our tax service has been doing very well in this respect, because according to available information, although it may differ from Mr Mishustin's data (Mikhail Mishustin, head of the Federal Tax Service), the collection of all taxes administered by the consolidated budget of the Russian Federation reached nearly 10 trillion roubles in 2011, which is 25% more than in 2010. This year everything seems to be…

Mikhail Mishustin: We have collected 9.2 trillion roubles in taxes in January-October.

Dmitry Medvedev: So, it is about 10 trillion roubles again?

Mikhail Mishustin: No, more than that. The amount we have collected to date is approximately 15% larger compared to the same period of last year.

Dmitry Medvedev: Indeed, figures are an important element, but they are not everything there is to it, because work, and in particular Government service, includes relations between people. On the one hand, the issue involves public relations, as lawyers say, where the parties are your service as a representative of the Government and the taxpayers, both legal entities and private individuals, for whom the payment of taxes is very important.

Therefore, the removal of administrative barriers and the use of advanced technologies are of key importance for the development of the Federal Taxation Service (FTS). Mr Mishustin (Head of the Federal Taxation Service Mikhail Mishustin) and I have just visited an average tax inspection office and seen new registration systems. I must admit, everything looks okay except for the salaries mentioned by employees. I hope everything I have been shown today will become standard practice for the FTS on the vast territory of this country – not only in Moscow and our European part but in all other regions as well.

As I understand, the FTS has more than 30 electronic services that provide information, consult applicants on taxation and business issues, and accept documents for state registration. We have seen today how an individual entrepreneur undergoes state registration. By and large this does not look worse than… At one time I assigned this task to the FTS head. I have seen how this is done in Singapore and this process has taken the same time. The only thing that we still lack is an opportunity to make electronic payments on a wide scale. I understand your colleague prepared the payment document in advance so he could show everything to me.

Mikhail Mishustin: We had this opportunity and we did not take advantage of it only because we did not want to wait for several minutes.

Dmitry Medvedev: It would take him a bit more time though.

Mikhail Mishustin: If you open an online account…

Dmitry Medvedev: Okay. All this sounds good. Based on available information, three-quarters of taxpayers can report online. This is a very high percentage, probably the best in the country. We want all federal agencies to go online but three-quarters is great. But we must press on because by creating comfortable conditions we will promote the development of our economy and make it attractive to investment. Both experts and entrepreneurs share this view. When the materials were prepared for me… I don’t know whether this is true or not but one figure stunned me. We will receive it today and will meet anyway. Eventually it will be published on your site and in the social media that will report on your meeting with me… Polls show that the share of our taxpayers that are satisfied with the performance of our tax bodies is not simply growing but reached 75% last year. If so, this is a very good figure. I think it is probably near the global level.

I am pleased to quote one more figure – I’m happy to talk about positive changes on the eve of the holidays. The World Bank has moved Russia from 105th place to 64 in its Doing Business rating for easing the administrative burden of paying taxes for companies. This is a seismic shift. At any rate, we know this is not a statistical error. We realise that foreign analysts and, I hope, our business people and other ordinary citizens note that our tax authorities are doing a better job and becoming more modern.

We face many challenges. The tax service must meet modern standards. Ongoing economic processes must be reflected in your documents and eventually in all decisions made at all levels, starting from the FTS top management and ending with tax inspections that resolve a host of tasks on the spot.

The FTS is the biggest civilian government agency. I’m not talking about military or law-enforcement bodies. It employs about 150,000 people, and this is a powerful force. The share of women is 83%. Here women and men are represented fifty-fifty but there are many more women in the FTS. Apparently, this gender balance is rooted in the history of the taxation service.

Salaries are the second item on our agenda. In fact, we have already started to discuss it. Salaries are really not very high but still a bit above the national average of 30,000 roubles per month. But this is an average figure and salaries are different in individual cases. You’ll tell me about this later.

We will also talk about housing because this is a very important issue and not an easy one for government officials. To my knowledge, about 4,500 are on the register and you are giving them subsidies. But apparently these subsidies are not enough. We should probably talk about this issue because it is on the agenda of government agencies.

That concludes my opening address. I’d like to congratulate all those present on the holiday once again and ask them to take part in our conversation. I don’t have a list of speakers, so please go ahead and take the floor. I don’t know who will be the first to speak. Mr Mishustin, would you like to?

Nadezhda Okhlobystina (head of the department for taxpayer relations of the FTS regional inspection office №9 in the Tver Region): Mr Medvedev, may I be the first to ask you a question?

Dmitry Medvedev: I’m scared. Okay, Ms Okhlobystina. Go ahead.

Nadezhda Okhlobystina: Nadezhda Okhlobystina. I work for a tax inspection office in Tver. I know you are an active user of the web. We also have many online services. Could you tell us please whether you have used them? If so, do you like them? And what can you suggest?

Dmitry Medvedev: I’m sure Mr Mishustin put you up to asking this question because he is the main driver of these processes. I don’t see anything wrong with that. On the contrary, it’s very good that you gave such a strong impetus to this work because this is how things will work in the future.

As for me using your services, I mentioned this a few times in my remarks and gave instructions to your boss. On several occasions, I watched how these services work together with Mr Mishustin. Personally, and let me be honest about it, I don’t use them because my life is very structured now. If you had asked me this question 13 years ago, I would have absolutely told you that I do, because I was in the consulting business back then and made my living working in the corporate world. These issues, just like the ones pertaining to tax legislation, were part of my job. I was actually good at them. Of course, I’ve fallen a bit behind now. All papers that I file and all the documents that I look at are fully regulated by the laws governing presidential activities or the work of Government members. There’s nothing overly complex about this, and all this information is publicly available. I can say that the actual services have become much better. Things that I saw today that are based on Apple computers are absolutely up-to-date, comfortable and user friendly. My colleagues helped me get a quick overview of them and I could see for myself that filing tax returns using such a service is very easy. I hope this is happening in real life as well. You are from Tver, aren’t you?

Nadezhda Okhlobystina: Yes.

Dmitry Medvedev: A nice city and a relatively short ride from Moscow. Be honest, do you mostly work with paper documents or electronic devices?

Nadezhda Okhlobystina: Mostly electronic.

Dmitry Medvedev: You have regular taxpayers and businesses as clients. What are they using to file tax returns?

Nadezhda Okhlobystina: Urban residents prefer electronic filing whereas rural people understandably gravitate toward paper.

Dmitry Medvedev: Speaking about the city of Tver, do you have a sense that people are changing how they file their returns and are increasingly doing so electronically?

Nadezhda Okhlobystina: Yes, people are changing. They are doing great work. We are doing a great job, too, trying to help them go paperless. Our customers like it.

Dmitry Medvedev: While we are at it, I remember filing tax returns in Leningrad when the whole process was, to say the least, not user friendly. I needed to put together a bunch of documents, then bind them in a folder and take it to a tax office ... Since I was engaged in a variety of activities, I had a fairly large number of income sources, which is not a bad thing in itself, but doing all the associated paperwork has always been a separate chore that took much time to complete. I still remember the tax inspector who took care of my returns, a nice and obliging lady. However, in order to do all this work for a busy man running several things at a time... Honestly, it took me ... I think it took me a week to do this: first, I had to collect all sorts of different papers, then make an appointment with the tax inspector, then go there and wait in line for a while and then finally sit down and talk with the inspector. How much time does it take now?

Nadezhda Okhlobystina: That depends.

Dmitry Medvedev: In your taxation district…