The abolition of value added tax (VAT) for catering organizations will support entrepreneurs in a difficult period for the industry. This opinion was expressed by Kirill Purtov, Minister of the Moscow City Government and Head of the City Economic Policy and Development Department.

According to him, the idea of cancelling VAT was voiced by representatives of the business community at one of the first meetings of the Council for Strategic Development and National Projects under the Moscow City Government.

"After a detailed study it was supported by us. This would eliminate the need for them to split the business, give an opportunity to increase the number of staff and payroll, and expand opportunities to attract investment in development", - TASS quotes his words.

The minister noted that the measure would have a positive impact on the withdrawal of businesses from the gray area and in the future would entail growth of taxable income and the level of formal employment in the industry.

The authorities explained that VAT revenues from catering organizations with a revenue of up to 2 billion rubles is about 15 billion rubles. They will be replaced by additional income tax, personal income tax and insurance contributions from the same organizations.

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Author: Maria Buzanakova