Approbation of an integrated methodology for evaluating the effectiveness of the special tax regime "Professional income tax" on the example of subjects of the Volga Federal District

Kustov Nikita Alekseevich Postgraduate student; Department of Accounting, Audit and Economic Analysis; Perm State National Research University 14 Kuibyshev str., Perm, 614000, Russia parolaks@yandex.ru Other publications by this author

introduction

To date, various changes in the state tax policy of the Russian Federation in relation to individuals represent an urgent topic for comprehensive research. Of particular importance is the issue of assessing and forecasting the consequences of the introduction of these changes affecting socio-economic indicators, both for individual subjects of the Russian Federation and the country as a whole.

One of the most important tax innovations of the last decade was the adoption of Federal Law No. 422-FZ dated November 27, 2018 "On conducting an experiment to establish a special tax regime "Tax on professional income"^[1] (hereinafter - the NPD). This special tax regime has a pronounced stimulating character and acts as a preferential tool that promotes the involvement of new taxpayers. This regime is also aimed at simplifying the tax system for self-employed citizens, giving them the opportunity to legalize their activities with minimal tax rates and a reduced administrative burden. The result of the introduction of this regime was conceptually supposed to contribute to an increase in the number of officially registered entrepreneurs, an increase in tax revenues to the budget and a decrease in the level of the shadow economy in Russia.

The results of the implementation of this tax regime demonstrated a significant increase in the number of registered NAP payers, but at the same time revealed a number of negative effects. This underlines the need for further improvement of this mechanism, which is possible through regular evaluation of the effectiveness of its application. Based on such assessments, it makes sense to make adjustments aimed at eliminating the identified problems and improving conditions for all participants in economic and tax relations.

In the previous article, the author proposed an integral methodology for evaluating the effectiveness of the NPD^[2], this paper presents its practical approbation on the example of the subjects of the Volga Federal District (hereinafter – PFD).

THEORETICAL FOUNDATIONS OF THE STUDY

In the context of dynamically changing tax legislation, the issues of assessing tax efficiency for individuals are becoming increasingly relevant. In domestic practice, this area is still insufficiently developed. Modern methods of assessing tax efficiency are mainly focused on legal entities. The subject for assessing tax efficiency is often tax benefits. Thus, in the work of O. N. Savina, an analysis of regional methods for evaluating the effectiveness of tax benefits is carried out, which concludes that these methods are practically an ineffective mechanism ^[1]. Next, we note the work of O.V. Mandroshchenko, devoted to the substantiation of methodological approaches to assessing the effectiveness of tax benefits, in which the author offers various criteria for evaluating the effectiveness of tax benefits from the position of their recipient and target setting ^[2]. Another notable study in this direction is the work of Pinskaya M.R., Steshenko Yu. A. and Tsagan-Manjiev K.N., who were engaged in the development and testing of a methodology for evaluating the effectiveness of investment tax benefits based on financial and economic data of beneficiary organizations ^[3]. It is also important to note the work of M.O. Kakaulina and D.R. Gorlov, who assessed the impact of tax incentives on the investment activity of residents of special economic zones in the Russian Federation and came to the conclusion about the uniqueness and usefulness of this tool, which helps stimulate business development in specific territories ^[4]. In the work Okun A.S. and Steshenko Yu.A., a methodology is proposed for evaluating the effectiveness of tax incentive mechanisms in a decomposed form (by industry), since tax benefits are not provided equally to all taxpayers ^[5]. Theoretical approaches to assessing the effectiveness of tax incentives can be used to assess the tax effectiveness of special tax regimes.

Evaluation of the effectiveness of special tax regimes in the context of analyzing the dynamics of tax benefits under special tax regimes used by small businesses is considered in the work of M. V. Polinskaya, K. S. Balyukova and P.I. Psalm ^[6]. Also, the article by Kashirina M. V. and Klyuchikhina G. A. presents an assessment of the effectiveness of special tax regimes in terms of improving legislation on their use ^[7]. Among foreign researchers in this field, the work of Timuş Angela, Iordachi Victoria, and Cociug Victoria stands out, who evaluated the effectiveness of tax incentives for microenterprises in various countries that applied a special tax regime based on the patent system ^[8]. Also in the work of Anatolijs Prohorovs and Julija Bistrova, devoted to the study of the effectiveness of the introduction of a single tax for microenterprises in Estonia, Latvia and Lithuania, an assessment of the effectiveness of these tax regimes was carried out, following which the authors developed proposals for improving this tax system in Latvia ^[9]. Next, we note the article by M.M. Abdellatif, B. Trannam, B. Ramdani analyzing the effectiveness of the implementation of the simplified tax regime in Egypt, taking into account the assessment of the negative consequences of using this tax regime ^[10]. Specific methods for evaluating the effectiveness of special tax regimes for individuals are not available in both domestic and foreign scientific and specialized literature.

Insufficient attention is currently being paid to methods of assessing the effectiveness of taxes and tax regimes for individuals. G. N. Ardasheva's research analyzes the economic essence and features of the application of tax benefits for individuals in the Russian Federation. The author also proposed recommendations for changing this part of the tax system aimed at improving benefits for individuals in Russia ^[11]. Also in this context, we highlight the work of Basnukaev M. Sh., in which the author conducted a generalized analysis of foreign experience in the use of tax instruments in order to assess the effectiveness of personal income tax for social purposes during the transition to a progressive system of taxation of personal income ^[12].

In the part concerning the special tax regime "Tax on professional income", specific methods for evaluating its effectiveness are not presented in the domestic scientific and specialized literature. The main attention of researchers is paid only to assessing the risks of applying this tax regime, and among the authors involved in this area, the works of Smirnova E.E. ^[13], Zhitaev V.V. ^[14] and Chudinovskikh M.V., Dolzhenko S. B. stand out ^[15].

Also, among the studies describing the methods of evaluating the effectiveness of special tax regimes, it is necessary to mention the previous work of the author of this article. Thus, the author previously proposed a methodology for assessing the budgetary effectiveness of the special tax regime "Tax on professional income" by calculating the coefficient of net budget effect ^[16].

In the part concerning the study of the special tax regime "Tax on professional income", we recommend that you familiarize yourself with the author's previous publications revealing this tax regime as a preferential tax system ^[17], the results of assessing the place of the NAP in the tax legislation of the Russian Federation ^[18], an analysis of the positive effects and risks of the introduction of the NAP ^[19], and also, an assessment of the impact of socio-economic indicators of the subjects of the Russian Federation included in the Volga Federal District on the number of payers of the special tax regime "Professional income tax" ^[20].

Based on the results of the analysis of scientific literature, the author came to the conclusion that there are no methods in the domestic scientific and specialized literature that allow assessing the tax effectiveness of special tax regimes for individuals, including NAPS. At the same time, there is a need for a tool to assess the consequences of changes in tax legislation regarding the introduction of special tax regimes for individuals, which in the future will contribute to a balanced adjustment of tax policy in relation to these tax regimes.

THE RESULTS OF THE STUDY

Let's calculate using the integrated methodology for evaluating the effectiveness of the special tax regime presented by the author in the article "Integrated methodology for evaluating the effectiveness of the special tax regime "Professional income Tax" (hereinafter referred to as the Methodology) using the example of the special tax regime "Professional Income Tax" for subjects of the Volga Federal District for 2022, and analyze the results obtained.

Budgetary efficiency of the NPA

The calculation and evaluation of the coefficient of budgetary efficiency of the tax regime in the subjects of the Volga Federal District is based on the following data:

– revenues of the regional budgets of the subjects of the Volga Federal District according to the NPD, for 2022 (DPR);

– expenses of the regional budgets of the subjects of the Volga Federal District for the administration of the NPD for 2022 and losses in the form of lost profits of the regional budgets of the subjects of the Volga Federal District for other taxes and fees from the use of an alternative method of doing business corresponding to the direction of the special tax regime for the same period (RNR);

– the average interest rate for 2022 for subjects of the Volga Federal District on budget loans (i);

– the calculation period, which is 1 year, to assess the indicator of budgetary efficiency (n).

The first step in calculating the budget efficiency coefficient is the calculation of the RNR indicator (expenses of the regional budget for the administration of the tax regime for the accounting period and losses in the form of lost profits of the regional budget for other taxes and fees from the use of an alternative method of doing business corresponding to the direction of the special tax regime); as noted earlier, the Federal Tax Service has full information about the previous tax status of the registered NAP payer, and, accordingly, based on this information, the calculation of this indicator may be more reliable.

Since we do not have access to the above-mentioned FTS data, in this case it is proposed to calculate the RNR according to formula 2 specified in the Methodology, taking into account the following assumptions:

– all new individuals who registered as NAP payers during the study period were previously personal income tax payers;

– all new sole proprietors who registered as NAP payers during the study period were previously USN payers;

– the expenses for the tax administration of the NPA are not taken into account separately, since this tax regime is completely digital in nature, which leads to insignificant budget expenditures for its administration.

Based on these assumptions, we present in Table 1 the data for calculating the PHP indicator.

Table 1

Data for calculating the RNR indicator for the subjects of the Volga Federal District for 2022

(Compiled by the author, the sources of information are presented in Table 2)

All data were obtained for 14 subjects of the Volga Federal District in 2022 from official sources, the sources of data are presented in Table 2.

Table 2

Sources of data for calculating the RNR indicator for the subjects of the Volga Federal District for 2022

(Compiled by the author)

Based on the data obtained, we will calculate the RNR indicator according to formula 2 specified in the Methodology for the subjects of the Volga Federal District for 2022, the calculation results are presented in Table 3.

Table 3

The result of calculating the RNR indicator for the subjects of the Volga Federal District for 2022

(Compiled by the author)

After calculating the RNR indicator, let's return to calculating the budget efficiency coefficient of the special tax regime of the NPD. In Table 4, we present the collected data on the subjects of the Volga Federal District for 2022 to calculate this coefficient.

Table 4

Data for calculating the budget efficiency coefficient for the subjects of the Volga Federal District for 2022

(Compiled by the author, the sources of information are presented in Table 5)

All data for calculating the budget efficiency coefficient were obtained for 14 subjects of the Volga Federal District for 2022 from official sources, the sources of data are presented in Table 5.

Table 5

Sources of data for calculating the budget efficiency coefficient for the subjects of the Volga Federal District for 2022

(Compiled by the author)

Based on the data obtained, we will calculate the budget efficiency coefficient of the NPD according to formula 1 specified in the Methodology, the calculation results will be presented in Table 6.

Table 6

The result of calculating the budget efficiency coefficient for the subjects of the Volga Federal District for 2022

(Compiled by the author)

According to Table 6, we conclude that the low budgetary efficiency of the NAPS in all subjects of the Volga Federal District, for which there are a number of reasons. One of the reasons may be the application of this special tax regime as a way for taxpayers to reduce their tax burden. Until 2019, there was no equivalent of the NPD in the Russian Federation, and in order to conduct "legal" entrepreneurial activity, citizens had to register as an individual entrepreneur. Since the NAP is a preferential tax regime, some taxpayers have switched to a new tax regime in order to reduce their tax burden.

It is also necessary to take into account that the RNR indicator in this case was calculated indirectly, and if more accurate data were available, which the Federal Tax Service has, the results of calculating the budget efficiency coefficient for the subjects of the Volga Federal District for 2022 according to the NPD would be more reliable, but the value of this indicator would also be expected to be less than 1.

The social effectiveness of the NAP

Let's move on to calculating the social effectiveness of the special tax regime in the subjects of the Volga Federal District for 2022. To calculate this coefficient, we need to compare the data on the number of registered taxpayers in the subjects of the Volga Federal District for 2022 at the beginning and end of the billing period with the number of able-bodied population in the subjects of the Volga Federal District for 2022, respectively, at the beginning and end of the billing period.

In Table 7, we present the collected data on the subjects of the Volga Federal District for 2022 to calculate the coefficient of social efficiency of the tax regime.

Table 7

Data for calculating the social efficiency coefficient for the subjects of the Volga Federal District for 2022

(Compiled by the author, the sources of information are presented in Table 8)

All data for calculating the social efficiency coefficient were obtained for 14 subjects of the Volga Federal District in 2022 from official sources, the sources of data are presented in Table 8.

Table 8

Sources of data for calculating the social efficiency coefficient for the subjects of the Volga Federal District for 2022

(Compiled by the author)

Based on the data obtained, we will calculate the coefficient of social efficiency of the NAP according to formula 3 specified in the Methodology, the calculation results will be presented in Table 9.

Table 9

The result of calculating the coefficient of social efficiency for the subjects of the Volga Federal District for 2022

(Compiled by the author)

According to Table 9, we conclude that the special tax regime "Professional Income Tax" has a high social efficiency in the subjects of the Volga Federal District. However, we also observe a significant variation in the data obtained. In a number of subjects of the Volga Federal District, the increase in the number of taxpayers of this regime in 2022 occurred at a much higher rate (for example, in the Penza region) than in others. And in other regions of the Volga Federal District, the dynamics also differs, this is partly explained by the different timing of the implementation of this tax experiment: for example, the Republic of Tatarstan (Tatarstan) has been participating in the NAP since 2019, and the Nizhny Novgorod Region, Samara Region, Perm Krai and the Republic of Bashkortostan – since the beginning of 2020.

As a result of testing the methodology for calculating the social efficiency coefficient, a result was obtained characterizing the change in the dynamics of the number of taxpayers of the special tax regime.

The economic efficiency of the NAP

Next, let's move on to calculating the economic efficiency of the special tax regime in the subjects of the Volga Federal District for 2022, the essence of the calculation of which is to compare the average income (before taxation) of taxpayers of the special tax regime in the subject of the Volga Federal District for the billing period with the nominal accrued wages for the billing period in a similar subject of the Volga Federal District.

In Table 10, we present the collected data on the subjects of the Volga Federal District for 2022 to calculate the coefficient of economic efficiency of the tax regime.

Table 10

Data for calculating the coefficient of economic efficiency for the subjects of the Volga Federal District for 2022

(Compiled by the author, the sources of information are presented in Table 11)

All data for calculating the economic efficiency coefficient were obtained for 14 subjects of the Volga Federal District in 2022 from official sources, the sources of data are presented in table 11.

Table 11

Sources of data for calculating the coefficient of economic efficiency for the subjects of the Volga Federal District for 2022

(Compiled by the author)

Based on the data obtained, we will calculate the coefficient of economic efficiency of the NAP according to the formula 4 specified in the Methodology, the calculation results are presented in table 12.

Table 12

The result of calculating the coefficient of economic efficiency for the subjects of the Volga Federal District for 2022

(Compiled by the author)

According to table 12, we conclude that the special tax "Professional Income Tax" has low economic efficiency for payers of this tax regime. The average monthly income of a NAP payer (before taxation) ranges from 12% (Perm Region) to 20% (Kirov region) from the amount of the monthly average nominal salary in the subject of the Volga Federal District. According to this indicator, it makes sense to state that the majority of NAP payers use this tax status as an additional source of income, or some of the NAP payers, having this tax status, do not carry out their "active" entrepreneurial activities on a permanent basis. In any case, the values of this indicator characterize the cumulative low profitability of this sector of the economy in comparison with employment.

As a result of testing the methodology for calculating the coefficient of economic efficiency, a result was obtained reflecting the "profitability" of the special tax regime for the taxpayer.

Integrated assessment of the effectiveness of the NAP

Based on the results of calculating the coefficient of budgetary, social and economic efficiency of the special tax regime "Professional income tax", we will proceed to calculating the integral indicator of the assessment of this tax regime. The calculation of the integral indicator makes it possible to conduct a summary assessment of the special tax regime according to the estimated parameters and make a cumulative conclusion about its effectiveness.

In Table 13, we present the data for the calculation and the results of the calculation of the integral indicator, produced according to formula 5 specified in the Methodology for the subjects of the Volga Federal District for 2022.

Table 13

The result of calculating the coefficient of integral assessment of the tax regime for the subjects of the Volga Federal District for 2022

(Compiled by the author)

Based on the results of calculating the coefficient of integral assessment of the tax regime of the NPD for the subjects of the Volga Federal District for 2022, we conclude that this special tax regime turned out to be ineffective in terms of the totality of the parameters evaluated in this work. However, it is necessary to give some important remarks and explanations here.

1. If this methodology is used on more accurate data (available from the Federal Tax Service, Rosstat, and other government agencies), the result of an integrated assessment of the tax efficiency of the NPD may differ from that calculated by the author in this work. However, the author of this work aimed, first of all, to develop a methodology that, in the absence of accurate data, gives an approximate, but at the same time predictable and reasonable result (see below).

2. It is important to note that the introduction of a special tax regime "Tax on professional income" set as its main goal the withdrawal from the "shadow" of self-employed citizens who carry out their business activities without registration with the tax authority. Within the framework of this conceptual approach, declared by the legislator, every additional ruble received under this regime will already indicate its effectiveness (the cost of tax administration is minimal). Therefore, for this approach, it would be advisable to assess the absolute effect of revenues from this tax to the budget, studied in dynamics. The observed positive dynamics from the receipts of this tax in this regard already shows the effectiveness of the measures taken by the legislator at the initial stage of implementation. At the same time, in the future it will be necessary to assess the effectiveness of this tax regime not only and not so much through the prism of absolute budget revenues, but through relative indicators – in what amount individuals brought out of the shadows could pay taxes to the budget if they refused to apply the studied preferential tax regime. That is, given the equality of the tax base that make up the total amount of their income, it makes sense to talk about the potential amount of additional tax revenues that could potentially be collected when self-employed persons apply other tax regimes. It seems that the future tax policy of the state will be built in this way – by providing opportunities to get out of the shadows, at the initial stage, the self-employed will first be guaranteed a preferential tax regime. In the future, the state will be able to adopt legislative innovations, excluding benefits for them. By controlling the non-reduction of the tax base (income), the state will be able to increase tax revenues in this way. Historically, this has already happened with the refusal to apply the preferential rate of insurance premiums for entities applying the simplified taxation system at the turn of 2010. The method proposed by the author uses exactly this criterion of effectiveness. Comparing the amount of tax revenues under the preferential regime with potential taxes that could be calculated using traditional regimes, as well as evaluating the "average" return of a taxpayer under this tax regime, the author states low budgetary and economic efficiency, which leads to an integral efficiency of less than 1. That is, the author's calculation algorithm includes losses in the form of lost profits – the potential amount of taxes and income of NAP payers that could be paid by taxpayers applying a preferential tax regime in case the state refuses to apply reduced tax rates. It seems that this will happen in the future, and in this context the author's approach is "ahead of time".

3. Meanwhile, what is interesting, in our opinion, is not even the fact that for all the studied subjects of the Russian Federation included in the Volga Federal District, the integral indicator turned out to be less than 1, but the wide differentiation of the results obtained (from 0.195579749 in the Nizhny Novgorod region to 0.47743978 in the Republic of Mordovia). Having such heterogeneity, it becomes possible to conduct a comparative analysis of the effectiveness of the application of the tax regime under study both in general and by individual indicators, thus identifying potential opportunities to increase tax revenues for this tax to the budget and (or) improving the performance of the region's economy. In this aspect, the methodology can be useful for setting targets for public authorities of the constituent entities of the Russian Federation, applying budgetary mechanisms to encourage advanced regions, etc.

conclusion

Based on the results of the testing of the integrated methodology for assessing the effectiveness of taxation on the example of the NPD, we conclude that it is applicable for the purpose of evaluating special tax regimes for individuals. The application of this methodology allows us to take into account the individual characteristics of the assessed tax regime and assess its impact on socio-economic indicators.

The use of an integrated methodology makes it possible to assess not only the budgetary effectiveness of the special tax regime, but also its social and economic consequences. This is a new and non-standard tax policy tool that allows you to assess a wide range of consequences of the introduction of various special tax regimes and compare their effectiveness with each other.

From a practical point of view, using an integrated methodology for evaluating the effectiveness of special tax regimes, it is possible to determine how successfully a particular special tax regime copes with its tasks and achieves its goals. The effectiveness assessment helps to identify problems and shortcomings, as well as identify ways to solve them.

This approach to the assessment of special tax regimes opens up new opportunities for making informed decisions in the field of tax policy, taking into account both financial and social aspects. As a result, the use of an integrated methodology can contribute to more effective management of tax regimes and reduce negative socio-economic consequences.

^[1] Federal Law "On conducting an experiment to establish a special tax regime "Tax on professional income" dated 11/27/2018 No. 422-FZ.

^[3] Budget Code of the Russian Federation No. 145-FZ dated 07/31/1998 (as amended on 02/26/2024) Paragraph 3 of Article 146