Snack Vending: Why the tax levy won't kill a business

This year, there was a public discussion around raising the tax levy for vending machine owners. According to market players, the new tax rate is unfair and threatens business. As a result, this will cause some of the points to close or go into the "shadow". However, experts remind that for six years, the owners of vending machines were spared from paying the fee and were able to save a lot. Izvestia dealt with this difficult situation.

Background of the issue

The theme of the trade fee, which was established in Moscow for the owners of vending machines, attracts a lot of attention. The number of vending machines registered with the tax service exceeds 10 thousand, however, according to the Union of Vending Machine Operators, in reality there are more of them — taking into account the gray market, about 30 thousand can operate in the capital.

The trade fee was established in Moscow on July 1, 2015. Its value depends on the type of trading activity, as well as the physical characteristics and location of the trading facility. But it was not applied to everyone — the owners of vending machines were exempt from paying it until 2021. In 2021, they were charged a trade fee of 4,900 rubles per vending machine per quarter. Last year, it was increased to 5,184 rubles.

This year, the rate was indexed in accordance with the deflator coefficient, which is set by the Ministry of Economic Development of Russia. It is calculated taking into account accumulated inflation for the entire duration of the trade fee, that is, since 2015. The trade fee rate for one vending machine increased by about 1,686 rubles per month. That is, a business will have to pay more than 10 thousand rubles per quarter from one vending machine, or about 3.4 thousand per month.

Is everything so critical?

The Union of Vending Machine Operators said that such expenses destroy the entire economy of their microbusiness: some outlets will have to close or go into semi-legal existence. The entrepreneurs appealed to the Ministry of Economic Development, the Ministry of Industry and Trade and the metropolitan government with a request to reduce the amount of the fee.

— Obviously, an increase in taxation will never be a joy for entrepreneurs, but the actions of the authorities in this case are understandable and logical: rates are set in nominal terms, and in conditions of high inflation they should be periodically reviewed. Of course, you need to understand the "economics" of the business itself (and vending machines are something very specific), and therefore it is difficult to judge how sensitive the rate of 3.4 thousand rubles per vending machine per month is for a business, but this is a business where competition rules work," said the director of the RANEPA Center for Regional Policy, Doctor of Economics Sciences Vladimir Klimanov.

According to the calculations of the Union of Vending Machine Operators, which unites more than 40 companies, the revenue of one vending machine in the capital averages about 35 thousand rubles per month. If the location is good, then they can earn 100 thousand rubles. But according to Leonid Nesterenko, the president of the union, there are only a few of them. At the same time, some vending machines earn about 15 thousand rubles per month. Taking into account the cost of purchasing groceries, rent, taxes, the net monthly profit averages about 6 thousand rubles.

Nikita Krichevsky, an economist, Doctor of Economics, Professor, disagrees with this assessment, who published a brief analysis of the situation on his Telegram channel.

— According to my sources in the industry, about three dozen market players account for more than half of the registered vending machines, and their average revenue per vending machine is about 1.4 million rubles. Starting this year, the sales fee for one vending machine will amount to 40,976 rubles per year, or about 3% of last year's revenue. This year, revenue will predictably grow due to inflation," he writes.

Tatiana Tirskikh, Managing Director for Sovereign and Regional Ratings at Expert RA JSC, noted that since "vending machines have not been subject to a trade fee for six years, and after its introduction in 2021, the fee was increased only once, and taking into account inflation during this time period, an increase of 1.7 thousand rubles per month is a natural move."".

"In addition, prices for products in devices that are higher than the market average have also increased significantly over the past ten years," she said in a conversation with Izvestia.

There is one more nuance. Many establishments with vending machines are actively developing alternative outlets where you can buy food and drinks at a more affordable price. For example, in Moscow, there is a massive reconstruction of medical institutions — in addition to updating equipment and repairing buildings, buffets are being opened in them and water coolers are being installed.

— In general, officials cannot complain that they are trying to crush a specific vending business: for a long time in Moscow, there were benefits directly for such vending machines, exempting them from paying a trade fee, plus there are various programs to support small businesses as such, — Klimanov notes.

However, according to him, it is worth remembering that the increase in the tax burden, which resulted from last year's changes in legislation, may increase negative trends.

At the same time, Semyon Grishaev, Vice President of the Moscow Chamber of Commerce and Industry, considers the topic of indexing the trade fee rate for vending machines to be overblown. He explained to Izvestia that if an increase in the fee by 1.5 thousand rubles per month for one vending machine is critical, then this may indicate possible miscalculations by business owners.

"Modern entrepreneurs, even small ones, should not forget that they operate in market conditions that imply not only fierce competition, but also regularly changing external factors — and this must always be taken into account in their development strategy," he added.

The coming transformation

Most likely, there will be a change in the industry in the near future. Vendors will have to adapt to the market in order to earn more and cover the increased costs. Those small players who cannot do this will leave, but the vending machines installed in the most accessible places, such as airports, train stations, and shopping malls— will certainly remain.

According to Sergey Kornienko, the founder of FreeZ, devices from the metro, schools and clinics will not disappear, as they have good profitability, and the trade fee reduces the Moscow part of income tax.

— Devices with low profitability may disappear, but most likely they will be redistributed into the hands of individual entrepreneurs on a patent who do not pay a trade fee. The market will look more at combined devices, for example, coffee plus snacks in one, and self—service office micromarkets, the cost of which is lower than vending, and the payback period is shorter, he is sure.

According to Leila Shamuzova, Deputy Head of the Consumer Market Development Center at the Moscow State University Faculty of Economics, for those vending machine operators who meet the expectations of the authorities in terms of choosing the optimal location, quality, appearance, and assortment (for example, they offer a socially significant set of goods) It is worth considering potential relief or additional incentive measures when using the applicable trade fee recalculation methodology for the industry as a whole.

At the same time, according to her, the change in the trade fee should be considered not so much as a fiscal measure, but as a tool for managing the industry and the quality of urban space.

"As international practice shows, developed countries are interested in efficient and cost—effective vending, which can not only reduce the labor intensity of retail trade in conditions of shortage of personnel, but also offer consumers high-quality goods and a unique assortment at points of high demand, and become part of the surrounding landscape," Shamuzova added in a comment to Izvestia.