Taxes and tax reforms in Russia: description, features and directions

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Since 1990, a large-scale tax reform has begun in the Russian Federation. In April, a draft law on fees from citizens of the country, foreigners and stateless persons was submitted for consideration. In June, a normative act on mandatory contributions to the budget of enterprises, organizations and associations was discussed.

Taxes and tax reforms in Russia: regulatory framework

The key provisions of the current program for the collection of mandatory payments to the budget were approved at the end of 1991. Then the main law regulating this sphere was adopted. The normative act established taxes, duties, fees and other deductions, defined subjects, their obligations and rights. In addition, other laws on specific taxes were adopted, which came into effect from January 1992. Major tax reforms thus took place at the beginning of the last decade of the last century.

Structure

The reform of the tax system took place with the adoption of more than 20 regulations. On November 21, 1992, by presidential decree, a controllingan independent body - the Federal Tax Service. This service was entrusted with key functions for the development and subsequent implementation of the country's tax policy. The legislation has defined 4 groups of fees:

1. National. They were set at the federal level.
2. Local. They were determined by the territorial structures of power, according to the legislative acts of the subjects.
3. Republican fees, taxes of administrative and national-state formations. They were established by decision of government agencies and the laws of the respective regions.
4. Compulsory national and local fees and taxes.

The composition of the deductions changed periodically in accordance with the decisions of government agencies.

First problems

Carried out in rather extreme conditions, the tax reform in Russia could not ensure the creation of an ideal financial institution. In the course of subsequent market transformations, its flaws became more and more noticeable. As a result, the tax system began to significantly slow down the growth of the country's economy. The key problem at that time was the budget deficit. It was due to insignificant volumes of revenues to the treasury against the backdrop of significant spending commitments.

Changes

By 1997, more than 40 types of fees and taxes were established in the country, which were paid by organizations and citizens. By this time, a three-tier structure had been formed. It included:

1. National fees. They were levied throughout the country according to uniformrates for each species.
2. Republican fees and taxes of administrative-territorial and national-state entities.
3. Local contributions to the budget.

Second stage

New tax reform started in 1999. It was marked by the entry into force of the first part of the Tax Code. It should be said that the Code was discussed for quite a long time. In the general part, the obligations and rights of subjects were established, the process of fulfilling obligations to the budget was regulated, control rules were determined, and responsibility for violations of tax laws was determined. In addition, the most important tools of the institute were introduced. Thus, the Code reflected the main aspects of tax reforms. More than 40 normative documents were developed and approved to ensure the implementation of the legislation. The most important result of that period was the approval of declaration forms and instructions for their preparation. It is worth noting, however, that while the document was passing through the Duma, it lost many innovative proposals. At the same time, the mechanisms and rules turned out to be far from perfect in reality. In this regard, many amendments have been introduced to the Tax Code over the past few years.

Transformations since 2000

With the beginning of the 21st century, the Government has taken several decisive steps to change the current situation in the country's financial sector. Priority areas for tax reforms were developed formedium term (until 2004). It was first assumed:

1. Reducing the excessive burden on the subjects, as a result of which the prerequisites were formed for evading the payment of mandatory amounts.
2. Weakening state fiscal control in favor of stimulating functions of the tax system.
3. Ensuring an even distribution of the burden on payers.
4. Reduce and redirect established tax credits.

Within the framework of interbudgetary relations, the government focused on the redistribution of revenues in favor of the federal budget relative to the regional ones.

Goals of tax reform

They are not about collecting as many payments as possible to solve the budget crisis. The key task today is to reduce the level of seizures as government obligations decrease. Tax reforms are focused on establishing a fair procedure for collecting payments from entities operating in various economic conditions. The approved state financial policy programs provide for an increase in the level of neutrality. Taxes should not significantly affect relative prices, savings processes, and so on. As a result, the costs of enforcing legislation should be reduced not only for the state, but also for the payers themselves.

Subsequent transformations

To implement the above tasks, tax reforms in the country were continued. In particular, since January 2001 there have beenintroduced 4 chapters of the second part of the Tax Code:

1. VAT.
2. Excises.
3. NDFL.
4. ESN.

Following tax reforms for 2005 suggested:

1. Reducing the load on payroll. This was planned to be achieved by lowering the UST rate. It was assumed that for incomes up to 300 thousand rubles. it will be reduced to 26%, from 300 to 600 - to 10%, over 600 - to 2%.
2. Change of the VAT calculation regime. It was envisaged that the rate would be reduced to 16%. In addition, the tax reforms included a revision of the refund of the fee to exporters. In addition, the possibility of providing electronic invoices to payers was actively discussed.
3. Change in property taxes. It was supposed to replace the existing fees with deductions from real estate. This practice was, in particular, introduced in the Tver region.
4. Establishment of preferential treatment for enterprises operating within special economic territories. This was to ensure innovation and investment activities.

Collection and control processes

Tax reforms are focused on flexibility and transparency, simplification and reduction of paperwork. The implementation of the tasks set provides for reducing the burden not only in the fiscal, but also in the administrative part. In particular, we are talking about reducing the payer's expenses for the implementation of legislation. As practice has shown, the reduction in the fiscal burden on some taxes took place along with a simultaneous increaseadministrative pressure. In particular, the volume of financial reporting has grown, the accounting of the payer's activities has become more complicated, and the control of state bodies has increased. In this regard, steps have been taken to:

1. Changing the structure of control bodies.
2. Development of information technology.
3. Improve management techniques.

Conclusion

The results of reforming the system of taxes and fees are generally assessed as positive. Between 2000 and 2003 the load share of GDP gradually decreased from 34% to 31%. As a result of the measures taken, there is a significant change in the structure of revenues. First of all, the share of deductions related to the use of subsoil increased significantly. At the same time, receipts from the profits of enterprises decreased, and personal income tax increased by almost one and a half times. There is a high proportion of fees intended for social, medical and pension provision. Their level is within 25%.