Small businesses may be exempted from administrative fines

The Ministry of Economic Development, along with with the SME Corporation, has prepared a package of amendments introducing a number of changes to the Code of Administrative Offenses of the Russian Federation. We are talking about the application of fines, which have been proposed to be reduced or eliminated in a number of cases. The measure concerns the activities of micro and small enterprises, as well as socially oriented non-profit organizations.

The exemption from an administrative fine with its replacement by a warning was proposed in a situation when an offense is committed for the first time. Thus, the small businesses will be taught a ‘lesson’ and will correct the mistakes without sacrificing their budget.

Among other things, it was proposed to reduce the amount of fines by equating them with the penalties for individual entrepreneurs.

The measure is related to the fact that among SMEs, there are mostly micro-enterprises, which are mainly represented by individual entrepreneurs, reports Vedomosti.

However, the difference in the amount of fines that can be applied to individual entrepreneurs and LLCs is incredibly large and can reach 900%. At the same time, the size of the fine does not correlate with the volume of revenue in any way, which means that an individual entrepreneur with a much higher turnover will receive a smaller fine for the same offense compared to a company. And the latter, in turn, may be on the verge of the collapse due to the imposition of a sanction on it.

For this reason, it was proposed to equate the fines for individual entrepreneurs with sanctions for micro and small enterprises, as well as socially oriented non-profit organizations.

At the moment, the bill is being prepared for submission to the government commission, and if approved, it will be submitted for consideration to the lower house of parliament.