Abstract
The article's objective is the research of delineation of tax powers with regard to stating tax preferences in the Russian Federation and their influence on the nature of tax competition and the consequences for budgets. It emphasizes that no analysis of the fiscal effect of tax preferences and control of the shortfall in tax revenues of the budget is performed on the government level. It is partially related to the unsolved state of the problem of tax relieves identification. It shows that the adopted in Russia mechanism of granting tax relieves for the regional corporate property tax includes excessive government control on the federal level, which incurs reduction of the level of vertical tax competition. As a result of such distortion, a shortfall in revenues of regional budgets emerges. Assessment of such revenues is neither made by the federal authorities nor by the regional are ones; and the respective losses of regional budgets not compensated by the federal budget. Through the example of the corporate property tax, it is illustrated that the main part of the shortfall in revenues relates to the preferences provided at the federal level. It is also revealed that the establishment of the institution of a consolidated group of taxpayers in the Russian Federation since 2012 had adverse impact on the powers of the regions of the Russian Federation in terms of their administration of the tax base of the territory. The distortion of the horizontal tax competition between regions for the taxpayer took place, as within a consolidated group of taxpayers, the net financial result of the group members suffers the tax, which contributes to erosion of the tax base (Base Erosion) with regard to the corporate profit tax. As a result, the amount of tax revenues to the regional budget does not depend on the actual contribution of each region to creation of favorable tax climate for investors.
Highlights
For modern Russia, high centralization of tax powers on the federal level of administration is typical
Let us consider the effects of distortion of the vertical and horizontal tax competition caused by the deficiencies in the delineation of the power levels of government with regard to tax relieves
Despite the fact that the executive authorities in the Russian Federation carry out calculation of performance indicators of tax benefits, they do not generalize the data for the tax relieves granted by the federal law
Summary
For modern Russia, high centralization of tax powers on the federal level of administration is typical. Regional authorities have minor powers regarding administration of the tax base, which is the source of their budgets' revenues. According to Article 12 Clause 3 of the Tax Code of the Russian Federation, the federal government states all essential elements of taxation with regional taxes and determines the taxpayers, and the limits of the power of the legislative (representative) authorities of the regions of the Russian Federation in the area of tax relieves are stated on the federal level. The opportunities of regions in creation of tax incentive mechanisms are rather limited. Regions try to actively use the tax relieves for attracting investors to their territories. The essence and the destination of tax relieves have been the object of focus of scientists and experts for a long period of history
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