RUSSIA IS LOOSING INDIVIDUAL ENTREPRENEURS

RUSSIA IS LOOSING INDIVIDUAL ENTREPRENEURS

RUSSIA IS LOOSING INDIVIDUAL ENTREPRENEURS
Statistical data for 2021 indicate that the number of individual entrepreneurs in Russia is rapidly declining. Experts note that the number of persons registered as individual entrepreneurs decreased by 4% for a period of January-July. This is the first time since 2013, when the state had doubled social taxes.

The most vulnerable industries turned out to be taxi drivers, owners of beauty salons and garages.

Analysts announced a dangerous trend of business contraction back in 2020. However, in 2021, judging by the data of the SPARK-Interfax service, the rate of liquidation of individual enterprises has noticeably accelerated. The number of liquidated individual entrepreneurs is 130 thousand ahead of the number of the opened ones (576 thousand versus 446 thousand).
And this is no to take into account those who managed to register as an individual entrepreneur and then officially liquidate the business.
According to experts, such dynamics may indicate that business has not coped with the current economic situation in the country. For the moment, there are officially 3.6 million individual entrepreneurs in Russia. At the same time, many businesses can move to the shadow sector of the economy, as reality shows.

The most massive reductions in the number of individual entrepreneurs took place in the metropolitan regions (Moscow, Moscow region and St. Petersburg). For example, the number of St. Petersburg businessmen in just one month (from July 10 to August 10) decreased by almost 3 thousand individual entrepreneurs (from 163 518 people to 160 631 people).

Experts note that along with the impact of the pandemic and related factors (reduction in the number of migrants, the need to purchase PPE and other restrictions), legislative initiatives also affected the situation(abolition of UTII, popularization of self-employment).
Many owners of individual enterprises practically failed to receive government support.
Most of all, the reduction was felt by the enterprises of the beauty industry. If on January 1, there were 112 thousand owners of beauty salons and hairdressing salons, then by August 1, their number decreased to only 95 thousand. In other words, the business shrank by 15%.

Those who were engaged in the carriage of passengers suffered no less. The number of taxi drivers fell from 83 thousand to 72 thousand people (by 14%). A serious problem has emerged in the car maintenance and repair sector, where the number of individual entrepreneurs has decreased by 8% (from 79 thousand to 72 thousand persons). According to experts, the main reason for such dynamics is the abolition of UTII.

01.09.2021