Moscow city government is expected on Nov. 14 to pass new legislation designed in part to help small businesses get out of the grip of overzealous or unscrupulous safety inspectors.
According to Yevgeny Yegorov, head of the city's small-business support and development department, the project will focus on providing administrative and legal information to companies, "many of which do not even know that they, as small businesses, have rights and benefits due to them. They really do lack information."
One of the key aspects of the legislation, Yegorov said, would concern the health and safety inspections conducted on small businesses in the city.
"The authorities have the right to inspect businesses just once a year, or twice in cases of emergency," he said. "But in reality, there have been cases when we have carried out inspections 10 times in one year on one enterprise."
Moreover, he said, "sometimes the inspections are held by unauthorized persons. For instance, a regular police officer will inspect the books of some company and then declare a problem. In fact, he's just trying to get some money from a scared small-business manager."
Yegorov said that running a business "starts to be unprofitable in this situation, leading many companies to turn to the shadow economy or just stop operating."
The new legislation will also set up small-business consulting centers where companies will be able to get information on their rights and opportunities, including subsidized rates on rent, and lower taxes on profits than large corporations.
The new legislation would require inspections to only be carried out under specific directives from the city government, Yegorov explained. If a would-be inspector does not have the proper orders, he will not be permitted to inspect the company. A new list would also be created that would show companies that had already been inspected and could not be checked again in the current year.
Yegorov said the problems involved with running a business mean that there is no accurate count of how many small-scale business operations are active in he city. "Overall, we have 700,000 officially registered enterprises, but only half of them pay taxes. This indicates that not all of Moscow's small businesses are really operating. Some of them just exist because it is too expensive to go through the procedure to officially close down."
Yegorov said that he hoped the new legislation would lead to an improvement in small-business operations.
"These problems will certainly be considered and solved. But the new law doesn't address the main issue, though, which is the absence of any definite state policy toward small business.
"State Duma legislators don't take small businesses seriously. The don't realize that these businesses are the key to creating a middle class and bringing real stability to Russia."