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Definition of the Taxation Manoeuvre Scenario that is Neutral for the Real Sector of Economy
Baidin Valerii Mikhailovich

Laboratory researcher at Financial Research Institute

127006, Russia, Moscow, str. Nastas'inskii Pereulok, 3, bld. 2, of. 211

vbaydin@nifi.ru
Abstract. This article is devoted to the definition of the taxation manoeuvre scenario that is neutral for the real sector of economy (this is the scenario when the insurance contribution rate is reduced and value-added tax is raised). The taxation manoeuvre is a part of the fiscal policy that is an efficient instrument for supporting economic activity and is used by many countries all over the world. As a result of his analysis, the author offers numerous neutral taxatikon manoeuvre scenarios in the form of the tax curve describing internal links between tax rates. The tax curve was drawn after comparing changes in cashflows created after the tax reform has been introduced based on the assumption that prices remain the same for consumers and use of the flat insurance contribution scale taking into account changes in the income tax shield. The scientific and practical importance of the research is caused by the fact that Baydin selects the topic that is very important for developing the fiscal policy of Russia. Based on the evaluations provided by the Ministry of Finances, the 22/22 scenaro (reduction of insurance contribution by 22% and increase of VAT by 22%) is not neutral. VAT can be increased up to only 19% in case the social contribution rate is reduced by 22%. The results of the research allow to conclude that disregarding the fact that this type of manoeuvre can be neutral for the budget and country's economy in general, it is not neutral for the real sector of the economy and even aggravates the sitution. The 21/21 manoeuvre under review of the Ministry of Economic Development is not neutral while reduction of insurance contribution down to 21% allows to increase VAT to 19.3 %. 
Keywords: Russia's economy, real sector of economy, tax curve, tax shield, taxation, tax policy, fiscal policy, VAT, insurance contributions, tax manoeuvre
DOI: 10.7256/2454-065X.2017.12.25101
Article was received: 27-12-2017

Review date: 26-12-2017

Publish date: 28-12-2017

This article written in Russian. You can find full text of article in Russian here.

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