Saturday, July 28, 2012

Capcha against massive registration spots

Central bank of a generic country had sent a letter (Dated 28 of June) to the banks, recommending to make use of "check yourself and the partner" system. Central bank's "recommendations" are generally acknowledged to be pretty obligatory among the banks and central bank's lower level employees.

One of the points of the letter is the idea of checking the address of the organization to avoid dealing with companies registered in massive registration spots. Those are buildings, where each square meter belongs to some organization, and a special person responds to tax inspection calls with a well-practiced "I am sorry, everyone in the management is out. Try some other day". Or sometimes the building just does not exist.

Problem is - these half-legal entities are not such an absolute evil. Yes, shadow economy in this country is huge. Yes, shadow economy does not pay taxes and operates by somewhat different, lower standards. But if fills in the void, where common organizations can't work. Shadow economy may just be a response to a demand for it, however Austrian it may sound.

What the letter would do for sure is discourage people from registering companies. The Federal Tax Service publishes disaggregated data on the enterprises registered. In separate excel files, so one has to write a parser for their website again, but you get used to it.

There are many things to plot, but what you get out of data is this:

(click to enlarge)

Seasonally adjusted with Tramo/Seats (February seems like a particularly unfortunate month). The data is for the 1st day of the corresponding month, so any changes should be reflected in the next month's value.

What we see is that the dynamics of newly registered companies is on a stable low level since last year. One can argue if the drop in December was the closing of phony companies, or not, but as for the idea of further discouraging entrepreneurship, it is, to say the least, not quite the perfect time.

It would be much more logical if we could just allow people to register companies in their apartments, the law is ambiguous on this matter anyway. For one thing, that would make tax inspectors job a lot easier.

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