Starting this year, fishery companies that produce products of deep processing can expect relief in paying tax rates for fishing. The government is considering a draft that provides a list of resources that fall under the exemption. According to plans, producers of fillet and meat (including minced meat), flour and granules, as well as other types of products will receive it. However, industry representatives ask to expand the list. Representatives of several fishing companies believe that the absence of a tax deduction may lead to a rise in the price of certain goods in retail. Details – in the material “Izvestia”.
Tax surimi
The All-Russian Association of Fishery Enterprises, Entrepreneurs and Exporters (VARPE) sent a letter to Deputy Prime Minister Victoria Abramchenko with a request to instruct the Ministry of Agriculture and the Federal Agency for Fishery to finalize the list of fish products for which a tax deduction is due. Another letter following this was prepared by the Union of Fishermen of the North. “At present, the documents have been sent for consideration to the Ministry of Agriculture and the Federal Agency for Fishery,” Izvestia was told in the office of the deputy prime minister.
Changes to the Tax Code on the fee for the use of aquatic biological resources came into force a month ago. Now payments are calculated at the new rates, while there is a system of deductions. The basis for it is the production of highly processed products from a list determined by the government on ships or at a coastal plant.
According to the new rules, until 2027, a reduced fee rate is provided, equal to 15% for city- and settlement-forming fisheries organizations.
As told in the Federal Agency for Fishery, the new provisions increase the tax on the catch of highly profitable valuable aquatic biological resources. For non-valuable and fish species caught for personal consumption, it is proposed to maintain the current rate of 20 rubles per ton. For each object, the rate is calculated at the level of 4.8% of the average price set by manufacturers when selling products.
However, representatives of the fishing industry are concerned that many will pay full natural rent. For fillet and meat (including minced meat), flour and pellets that are not suitable for food from five types of aquatic biological resources: pollock, herring and cod for the Far Eastern fishery basin, cod and haddock – for the Northern fishery basin – will pay a reduced tax (15%) , for all other types of products of deep processing, the tax will be full, which means that retail prices can rise (for example, smoked, salted, dried fish, semi-finished products, canned food may rise in price).
At the same time, it follows from the letter of the WARPE, “products of deep processing, to stimulate the production of which a tax deduction is provided, includes a wider range of products.” This includes canned fish and preserves, caviar, fish liver and milk, semi-finished fish products, etc., the text of the document says. They account for about 13% of the volume of fish production (564 thousand tons), while fish meat, fillets and flour, requiring additional processing before consumption, account for less than 9% (396 thousand tons).
“The fee for the use of aquatic biological resources is only one type of tax payment for the fishing industry,” said German Zverev, president of the VARPE, in an interview with Izvestia. – After its increase, the tax will be about 15-16% of the total burden on fishing enterprises, so it is not entirely correct to say that the growth of this type of tax alone will negatively affect retail prices. At the same time, the inequality in tax regulation between enterprises that produce canned salmon or salted and smoked herring, and enterprises that make pollock or cod fillets is wrong. Because the demand is focused on different types of products. The market, for example, wants crab sticks that are made from surimi. At the same time, the tax deduction (85%) does not apply to them, according to the project.
Photo: Izvestia / Pavel Bednyakov
At the same time, another letter was sent to Victoria Abramchenko by the Union of Fishermen of the North (SRPS). The organization notes that the draft list for the Northern Basin indicates production areas for which it is planned to provide a tax deduction, but there is no economic zone of the Kingdom of Norway (NEZ) among them, while cod and haddock quotas are provided for the entire area of mixed Russian -Norwegian Fisheries Commission without division into fishing areas.
“At the same time, on average, 30% of cod and 20% of haddock of the Barents Sea are caught in the NEZ per year,” Konstantin Drevetnyak, head of the association, told Izvestia. – It is not clear what will happen to the products obtained in this place: whether it is necessary to pay for the use of bioresources in the area, and if so, whether the deduction will apply to the catch from the NEZ.
In order to load onshore enterprises in Russia, it is very important to establish a tax deduction for aquatic biological resources caught by coastal fishing vessels, the letter from the SRPS notes. In addition, in order to stimulate, it is proposed to include in the list resources, the reserves of which are practically not exploited (algae, polar cod, etc.).
Salted fish don’t need a stimulus
The Ministry of Agriculture, however, insists that expanding the list will increase the export share of highly processed products (fillet, minced meat, flour). The draft order proposes to approve the types of goods with high added value.
— These proposals will help stimulate fishery enterprises to move from a raw material export to export products with high added value that are in demand on the world market, and will ensure production in Russia, which, in turn, will create additional jobs in the coastal regions of the Russian Federation – explained “Izvestia” in the press service of the Ministry of Agriculture.
Photo: Izvestia / Pavel Volkov
It is noted that the draft order does not include types of gourmet products made from catches of aquatic biological resources (crabs, shrimps, mollusks), due to the fact that they are not mass-produced by the consumer. In addition, there is no need to stimulate production due to high liquidity.
The Federal Tax Service and the Federal Antimonopoly Service did not respond to Izvestia’s requests at the time of publication of the material.
What affects prices in stores
The Association of Production and Trade Enterprises of the Fish Market offers a different approach – zero rates for deliveries to the domestic market and multiples for export (for example, pollock is not 4, but 40 rubles). “Everything else is half-measures, and they are far from the issues of saturating the domestic market and increasing the availability of fish for the population,” the association is sure.
“The new collection rates are a question of nothing,” the Association of Industrial and Commercial Enterprises of the Fish Market believes. — At retail prices for pollock of 170-200 rubles per kg, no one will notice an increase of 4 rubles. Or if we take the king crab – an increase of 80 rubles at its retail price of 3.5-4 thousand rubles per kg. Why 15% for certain types of products is incomprehensible and illogical, apparently, their manufacturers are good lobbyists.
The domestic market and prices on it are affected by the volume of supplied products, remind the association. If supply exceeds demand, prices are low; if there is a shortage, prices rise.
Photo: RIA Novosti / Kirill Kallinikov
“The reality is that, for example, the rate for burrowing molluscs for aquatic bioresources has increased 1,600 times compared to last year,” says Georgy Martynov, president of the Association of Fisheries Enterprises of Primorye. – And some enterprises live on the prey of these species. They make up 16% of the cost of all products. This means that soon enterprises will not be able to produce such a currency-intensive object. In the same way, the rate for pollock in the Sea of Japan in the Primorye subzone has critically increased.
The situation leads to the fact that it becomes unprofitable to supply fish to the domestic market, Martynov argues. According to him, “everything pushes fish producers to work more for export“. He believes that the rate on a number of aquatic bioresources is high and should be reduced in order to saturate the domestic market.
– Pollack, herring, cod – all these products may soon be very expensive, – says Georgy Martynov. — Moreover, even lowering rates will not allow it to be sold on the domestic market. It is also related to the investment policy, when the construction of one large-capacity vessel for the extraction and processing of pollock and herring costs at least $100 million, which are taken out by loans from banks, taking into account the decrease in purchasing power in our country. We believe that the domestic market of the Russian Federation is now left unprotected.
According to experts, the rise in prices for products from the “preferential” list can be up to 5-10%. At the same time, a larger jump is possible for other types of fish, such as flounder and sockeye salmon, Inna Golfand, an expert on the fish market, believes.
Photo: TASS/Lev Fedoseev
“Privileges have been introduced for fillets, minced meat, fish-bone meal from the main commercial fish species as an incentive to increase their own production,” says the interlocutor of the publication. “Now these products are mainly exported, but the domestic market must also be saturated. Other deeply processed products (smoked, dried, salted fish, canned food and preserves) and without benefits are widely distributed on the country’s commodity shelves.
