PEs “kill” PUEs with discounts

ERB has found out that a war between private entrepreneurs and those who registered as PUEs may take place in markets. It is because they are working side by side. However, a PUE has to make a revaluation and fill in a number of documents to make an ordinary discount. Private entrepreneurs decrease prices easily and attract PUEs’ clients. PUEs are getting angry.

“We are noncompetitive! They will simply kill us if it continues for some more time. They will simply deprive us of all our clients. Their turnover has increased because they can afford to lower prices and buyers go to them, - said a former entrepreneur selling household appliances in an interview with ERB.  Now he is a PUE Syarhei who is also selling household appliances in the market.  – And our buyers will browse 10 markets to get a discount of 100 roubles”.

Syarhei has been working as a private unitary enterprise for more than a month. “Very bad”, - he complains. The thing is not even that the taxes have increased. Working conditions of PEs and PUEs are not equal:

“Persons of management with different taxation systems work in the market. It is very bad. PEs have a totally different documents circulation and price formation…”

The entrepreneur says that a PUE has to make reevaluation to lower a price and to fill in a lot of documents. A private entrepreneur can simply order his seller to lower the price…
Sayrhei has to pay the state 8.5 millions as taxes for his five shops. It is twice as mush as he used to pay, says the entrepreneur.

“I have not paid taxes for the first month of my work yet. But I know that I owe the state 8.5 millions. It is a lot. I used to pay 4 millions for five shops”.

The PUE does not know what will remain after he pays the taxes:

“I pay 10% of the receipts so I already know the sum of the tax. And I still have to count what will remain. I will have to pay salaries and taxes and everything else… Then I will see…”

ERB has found out that legal entities dealing with production rather than trade were better off. Alyaksandr Davidovich produces tiles. He told ERB that he would have registered as a PUE regardless of decree #760. Even taking into account the increase in taxes:

“I had to employ several people and I hired three employees. It has become easier to work because I can employ as many people as I like without having to distribute them between several PEs and I can conclude normal contracts with them.

Second, a private entrepreneur’s book-keeping is not suitable for production. It is so inconvenient that you can even suffer losses…”

The entrepreneur was not worried about new taxes. He is going to develop other markets:

“I have no choice but only to develop other markets to be able to pay additional taxes. That’s it”.

According to Alyaksandr Davіdovіch, the taxes have not increased much – by about 7%. However, the price of tiles increased by 5 or 8% because part of the taxes had to be included in the cost price:

“I did not do it as a PE because the price was lower and it was more competitive. Now I changed the prices and some taxes are included in the prime cost. So I had to raise the price by 5 or 8%. Of course, the clients were not happy about it. Their reaction to the increase in prices was negative”.

The beneficial period or registration of PEs as PUEs ended on March 1. 3233 PEs have managed to register as PUEs. The business department of Minsk City Executive Committee informed ERB about it. We will continue watching the work of businessmen who have registered as PUEs.