Russian President
Address to Russian Citizens
25 March 2020
V. Putin: Dear citizens of Russia! Dear friends!
I am addressing you on a matter which is of concern to all of us now.
We see how sharply the situation with the coronavirus epidemic in the world is developing. In many countries, the number of people falling ill continues to grow. The entire world economy is under attack, and its downturn is already predicted.
Thanks to the measures taken in advance, we are still able to contain the wide and rapid spread of the disease. But we should understand that Russia - simply even by virtue of its geographical position - cannot shut itself off from the threat. Near our borders there are states already seriously affected by the epidemic, and it is impossible to completely block its penetration into our country objectively.
But what we can and are already doing is to work professionally, organized and ahead of schedule. And the main priority here is the life and health of our citizens.
The deployment of the system of timely medical care and prevention involves all opportunities and resources. I would especially like to address to doctors, paramedics, nurses, hospital staff, polyclinics, FAPs, emergency services, our scientists. You are now at the forefront of the country's defense. I sincerely thank you all for your dedicated work.
I ask citizens to pay utmost attention to the recommendations of doctors and authorities. A lot depends on it now. This is especially true for the most vulnerable groups of the population: older people and those who suffer from chronic diseases. Both for them and for all citizens, the task now is to reduce risks as much as possible.
Naturally, there is also a question of organizing an all-Russian vote on amendments to the Constitution, with a pre-determined date - April 22. You know how serious, how serious I am about this. And of course, I will ask you to come and express your opinion on this issue, which is of principle and key importance for our country and our society.
However, as I said before, the absolute priority for us is the health, life and security of people. Therefore, I believe that the voting should be postponed to a later date.
Let us assess how the situation will develop in the regions and in the whole country, and only on the basis of professional opinion, recommendations of doctors, specialists we will make a decision on a new voting day.
Next. Now it is crucial to prevent the threat of rapid spread of the disease.
Therefore, I declare the next week as non-working, with the preservation of wages. That is, the weekend will last from Saturday 28 March to Sunday 5 April.
Naturally, all life support structures, including medical facilities, pharmacies, shops, institutions providing banking, financial settlements, transport, as well as authorities at all levels will continue their work.
Once again, a long weekend is planned precisely in order to reduce the spread of the disease.
I appeal to all citizens of the country. Let us not act relying on our Russian "avos". Please don't think how we do it: "Ah, it won't touch me!" It can affect anyone. And then what is happening today in many Western countries, both in Europe and across the ocean, may become our nearest future. All recommendations must be followed. We must save ourselves and our loved ones, show discipline and responsibility. And believe me, the safest thing now is to be home.
I will speak separately about the current socio-economic situation. Here we also need additional steps, first of all, to ensure social protection of citizens, the preservation of their income and jobs, as well as support for small and medium business, which employs millions of people.
In this regard, the following priority measures will be implemented.
First. All social benefits that are granted to citizens should be automatically extended over the next six months, without the need for any additional certificates or instances. For example, if a family is entitled to benefits in the housing and utilities sector, it will not have to regularly confirm its income level in order to receive such support.
I would also like to draw your attention to the following: payments for the 75th anniversary of the Great Victory to veterans and home front workers in the amount of 75 and 50 thousand roubles respectively should be made before the May holidays, earlier than usual, already in April.
The second. It is necessary to support families with children. I suggest that in the next three months, starting in April, all families entitled to maternity capital should be paid an additional five thousand roubles monthly for each child under three years of age inclusive.
Such support is especially important for families where children are not currently attending nursery or kindergarten, for parents who are on sick leave or on vacation to care for a child.
As for our new support measure, namely, payments for children aged three to seven years inclusive, I instruct the Government to force all organizational measures so that families start receiving these payments not in July as planned, but a month earlier, already in June. I also ask governors to expedite the transfer of the necessary information from the regional civil registry offices to the tax service. Colleagues, it is essential that payments begin to be made. Pay attention to this.
Third. We need to support those who are on sick leave or have lost their jobs. Now the sick pay is calculated on the basis of the employee's experience and salary. As a result, employees, especially young people, can receive extremely low sick leave payments. This is certainly not fair. I propose setting a norm: sick pay should be calculated based on the amount of at least 1 minimal salary per month. For the time being, such a norm will be valid until the end of this year, and then we will make a decision based on the situation.
The Russian economy, as well as the economies of other countries, is under strong negative pressure due to the consequences of the epidemic. And, as I said, we need to support those who may face the loss of their jobs.
Now, except for some categories of citizens, the maximum payment of unemployment benefits is limited to 8 thousand rubles per month. I suggest increasing it to the level of the minimum wage, that is 12 130 rubles.
The fourth. Another area of risk is citizens' loans. It is clear that with a sharp decline in income it is difficult or simply impossible to pay off the debt in the previous regime.
I propose to provide for holidays on both consumer and mortgage loans. What are we talking about? If a person finds himself in a difficult life situation, namely: his monthly income has fallen sharply by more than 30%, he should have the right to temporarily suspend the servicing of his debt and prolong it. Without any penalties, of course.
I ask the Bank of Russia to provide for a similar mechanism to extend loans to individual entrepreneurs.
If the payment of debt for objective reasons is impossible in principle, then even in this case, a citizen should not get into a deadlock and become a hostage of creditor claims. The bankruptcy procedure should be feasible and not burdensome. I request the Government and Parliament to expedite the adoption of the necessary changes to the regulatory framework.
Fifth. Small, medium business, micro-enterprises, especially in the sphere of services, now face objective difficulties with the reduction of orders and revenues.
It is necessary to help such companies to continue their sustainable work, and thus to keep their employees. I repeat, our most important task now is to ensure stability in the labour market and prevent an upsurge in unemployment.
The state will assist businesses in solving this problem.
I propose to provide the following support measures for those enterprises, for those sectors that are most affected by the current difficult situation.
I think it is necessary for small and medium businesses to be granted a postponement on all taxes, except for VAT, for the next six months. And for micro-enterprises, with the exception of such a tax deferral, to give a deferral on insurance contributions to social funds.
As for bank loans, small and medium businesses, as well as micro-enterprises that are in a difficult situation, should also be granted a grace period for the next six months.
In general, I ask the Government and the Central Bank to propose and take additional measures to ensure sustainable crediting of the real sector, including the provision of state guarantees and subsidies.
Next. Enterprises that find themselves in a difficult situation should be protected from bankruptcy. In this regard, I propose to introduce a six-month moratorium on filing applications by creditors for bankruptcy of companies and recovery of debts and fines.
Again, these measures will be extended to companies that operate in the sectors most affected by the current difficult situation. At the same time, I instruct the Government to constantly monitor the situation and, if necessary, to expand and adjust the list of sectors that need support.
Sixth. Now we are obliged to do everything possible to support the income of citizens, especially those employed in small and medium-sized enterprises.
In order for such enterprises to have additional resources for this purpose, I propose to halve, from 30 to 15 percent, the amount of insurance premiums for them. Such a reduced rate will apply to the amount of wages that exceeds the minimum wage. If wages are at the level of the minimum wage or even lower for some reason, the rate will remain the same, 30 per cent.
I would like to draw your attention to the fact that the reduced rate will be introduced not for several months, not only as an anti-crisis measure, but for the long term. And thus we create a long-term incentive for employers to raise the salaries of their employees.
And finally, I propose two more measures. I'll tell you about them separately.
One. All payments of income (in the form of interest and dividends) leaving Russia abroad to offshore jurisdictions should be taxed adequately.
Now two thirds of such funds, and, in fact, these are the income of specific individuals, as a result of various schemes of so-called optimization are subject to the real tax rate of only 2%. Whereas citizens even with small salaries pay income tax of 13 percent. This, of course, to put it mildly, is unfair.
Therefore, I propose that those who withdraw their income in the form of dividends to foreign accounts should be subject to a tax rate of 15 per cent on such dividends. Naturally, this will require adjusting our double taxation agreements with some countries. I ask the Government to organize such work. If foreign partners do not accept our proposals, Russia will withdraw from these agreements unilaterally. And we will start with those countries through which significant resources of Russian origin are passing, which is the most sensitive for our country.
The second thing. In many countries of the world, the interest income of individuals on bank deposits and investments in securities is subject to income tax. Such income is not subject to taxation in our country.
I propose for citizens, whose total volume of bank deposits or investments in debt securities exceeds 1 million rubles, to establish a tax on interest income in the amount of 13 percent. That is, I repeat, not the deposit itself, but only the interest earned on such investments will be taxed on personal income.
I emphasize that this measure will affect only about one percent of depositors. At the same time, the conditions for placing funds in Russian banks will remain attractive and among the most profitable in the world.
The proposed solutions are not easy. But I ask you to treat them with understanding. And I would like to add that all additional budget revenues that will be generated by the implementation of the two measures, I propose to target them to finance measures to support families with children, to help people who have faced unemployment or are on sick leave.
Dear citizens of Russia!
All measures which are and still will be taken, will work, will give result if we show solidarity, understanding of complexity of a current situation. If the state, society, citizens will act together, if we do everything that depends on each of us.
We need to remember our personal responsibility for our loved ones, for those who live near us, who need our help and support. In general, such solidarity is the strength of society, the reliability of mutual assistance, the effectiveness of our response to the challenge we face.
Thank you for your attention.
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