Assessment of Factors Affecting Tax Revenues: The Case of the Simplified Taxation System in the Russian Federation

Abstract

The simplified tax system is the most common special tax regime in the Russian Federation in terms of the number of taxpayers. Tax revenues from the simplified tax system account for 6% of the structure of tax revenues of the consolidated budgets of the constituent entities of the Russian Federation and more than 93% of the structure of tax revenues from special tax regimes. The purpose of this study is to identify and assess the factors influencing tax revenues from the tax levied in connection with applying the simplified system of taxation (taxable object—income reduced by the amount of expenses). The objective of this study is to determine a set of factors used by economists to model the level of tax revenues and to conduct a corresponding econometric analysis of the influence of the selected factors on the dependent variable to identify characteristics of the simplified taxation system functioning in the Russian Federation. The object of this study is the per capita tax revenue from the tax levied in connection with applying the simplified system of taxation (the object of taxation is income reduced by expenses) in the Russian Federation. The subject of the research is a set of economic relations, which arise because of tax-legal relations between tax authorities and taxpayers in relation to the calculation of the tax levied in connection with the application of the simplified taxation system. This study’s hypothesis is that the amount of tax revenues is influenced by factors characterizing the economic situation and development of small and medium businesses in the constituent territories of the Russian Federation. This study was conducted in 83 constituent territories of the Russian Federation in 2020–2022. The research methods are statistical analysis and econometric modeling on panel data. During this study, six econometric models were constructed. Based on the results of specification tests, the least squares dummy variables model was selected. The results of the modeling show that the tax rate, the number of taxpayers, and the real average per capita monetary income of the population have a statistically significant impact on the per capita tax revenue under the simplified tax system (the object of taxation is income reduced by the number of expenses). As a result, the focus of economic policy at both macro and meso levels should be on the support of small and medium-sized enterprises in the early stages of their life cycle, as well as on the increase of the purchasing power of the population. Based on the results obtained, it is possible to forecast the revenue side of the budgets of the constituent entities of the Russian Federation.