The drive for professionalism

13th of November 2017
The drive for professionalism

In Russia, a new sector association has been formed by the largest cleaning companies. Oleg Popov of Cristanval Cleaning reports for ECJ.

In Russia this year an unprecedented event took place – the largest players of the cleaning market decided to jointly create an industry association designed to create a service market which will be more transparent, first of all in terms of pricing policy.

As is well known, a very large percentage of workers in the Russian labour market are illegal immigrants, especially people from central Asia, from the countries of the former USSR. Companies that employ immigrants often fail to pay taxes in full; sometimes either the employer or the worker disobey labour relations policies, and a lack of normal working conditions is often the case.

As a result, there are many ‘dumping’ companies on the market who are not interested in anything but profit. Given the threshold of entry to the cleaning market is very low (from $15,000 to $20,000) such companies appear constantly and in large numbers. Some of them leave after a while, some remain and work on small contracts at a low price.

Bigger companies that are working with large retail networks and corporate clients try to offer customers the lowest price, and to keep the big contracts, try to extract maximum profit, practically without dumping, since many have to account for big risks inherent to unstable young developing markets. While working with the largest customers, the price is often dictated by the customer, based on their budget.

More tax to be collected

The above situation had been developing long enough until the state decided to collect more taxes. Recently a qualitative reform of the Federal Tax Service has been carried out and the efficiency of its work has multiplied.

Members of the association decided, together with the Federal Tax Service, to regulate the cleaning market and make the pricing more transparent. To do this,  the amount of tax which the cleaning company should pay is calculated.

The members of the association will sign the Charter of a Conscientious Taxpayer, undertaking to register all personnel in accordance with the Labour Code and to pay all the related taxes. In case of a violation, the company in question will pay a huge fine and will be excluded from the association.

Companies that continue to dump will be blacklisted by the Federal Tax Service of Russia and will be subject to frequent unscheduled inspections. This work is planned to begin from January 01 2018, and the whole of 2018 will be a transitional period.

This initiative has been supported by many companies in the country - they want to make the market more professional. In addition, the cleaning companies of Russia will get real capitalisation, foreign investors will be able to invest in this sector, and purchase and sale transactions will be possible.


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