vlad.tribnet.com / Issue #156 / Business / Reading article...

Leaders of Primorye’s fishing companies gathered recently to warn the federal government against foot-dragging on a new tax code. Their reason: If tax laws in the region don’t get better soon, fish suppliers may face bankruptcy.

Fishing enterprises were particularly clamorous after the federal Duma recently passed in the first reading legislation which would require fishing companies to purchase licenses giving them the right to harvest a set quota of fish.

“This document has no equivalent in the world, and could finally kill the fishing industry,” said Vice-Gov. Fyodor Novikov recently. “The tax would only be the latest in a sum piled on fishing companies. They cannot survive on a double tax system like this.”

Novikov didn’t have it quite right, however: Licensing processes like this one has been established around the world for years.

Novikov also said that the licenses would add insignificant funds to the federal budget, though for local fishing companies it represents a significant part of profits.

Some of the fishing companies’ problems are self-inflicted. They have over-harvested for years, driving down fish prices around the world and slashing profits.

In addition, fishing giant Dalmoreprodukt is one of the krai’s largest debtors, with over 96 billion rubles ($16 million) in unpaid taxes. Despite continued prodding from krai tax officials, the company will remain in the red for a long time. Yuzhmorrybflot was recently turned over to external management after shoddy operation, according to Krai Administrative Department Chief German Zverev; and Primorrybprom – which employs 4,000 workers — continues to drive itself deeper into debt despite introduction of external management a year ago.

Alexander Yakovlev, Primorrybprom’s Deputy Director for Economic Affairs and a member of the company’s external management, blames federal and krai officials for not doing anything about tax problems sooner. “The situation is like a medical one,” he said. “You can heal a sickness at the beginning, but as it continues, there’s less chance of beating it.”