Threats to tax security of the region in conditions of innovative economy development (the Vologda Oblast case)

Abstract

Subject. The article deals with assessment of threats to tax security of the Vologda Oblast in the context of innovative economy development. During the development of the country’s technological sovereignty and innovative economy to resist the pressure of Western countries, it is critical to determine possible directions for improving the tax security of regions. Objectives. The study aims to analyze the impact of conditions for innovative economy development on tax security of the region, using the Vologda Oblast case. Methods. We employ special economic methods, including structural and dynamic analysis, analysis of tax base formation for taxes. Results. The paper presents our own definition of the concept of tax security of the region. It shows that in order to ensure the tax security of the region, the tendency to establish a regional budget based on corporate income tax is negative. We proved that innovative economy development with intangible assets on the balance sheet of enterprises will be a threat to tax security of the region, since their amortization will reduce the taxable income tax base. Using the PAO Severstal case, we demonstrate the possibility of enterprises to legitimately reduce the tax base for corporate income tax through managing the structure of net income and increasing the share of amortization. Conclusions. In conditions of innovative economy development, personal income tax should become the main tax that forms the budget of the region. The findings can be used by government authorities when planning the regional budget and establishing tax benefits.