According to Kommersant, the Russian government has proposed amendments to the tax regime for retail companies, according to which stolen goods would be exempt from tax payments upon the retailer making an application and getting confirmation from independent auditors. Currently, approval has to be gained from the state agency.
We note that tax exemption for stolen goods is not actually used by retailers at the moment. The filing process and the approval agency are not explicitly defined, making the exemption bureaucratically unjustifiable. As stolen goods account for a modest 1% of retail sales, the development is positive for sentiment, rather than financially. It does, however, highlight the existing potential of the retail lobby in light of the increased rhetoric on a further squeeze out of producers by the retail industry.
Maria Kolbina, Ivan Kushch, Nikolay Kovalev, Zlata Kryvichkina
VTB Capital analyst
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