Template-Type: ReDIF-Article 1.0
Author-Name: Alexander D. Andryakov
Author-Email: alex@eeg.ru
Author-Workplace-Name: Economic Expert Group, Moscow 109012, Russian Federation; Financial Research Institute, Moscow 127006, Russian Federation
Author-Name: Evgeniy A. Dombrovskiy
Author-Email: e-dombrosvky@yandex.ru
Author-Workplace-Name: Ministry of Finance of the Russian Federation, Moscow 109097, Russian Federation
Title: Fiscal Measures to Boost the Economic Development of Russian Territories
Abstract: Two possible directions of fiscal measures aimed at improving Russian territories’ economic development are discussed in the paper: one at the level of largest agglomerations and another one at the regional level. It is widely accepted that agglomerations are “engines” of economic growth. The Strategy of Spatial Development of the Russian Federation until 2025 pays special attention to the development of agglomerations. However, the latter process has not only natural limitations, but also institutional ones arising from low fiscal independence of municipalities which form agglomerations. To overcome the institutional limitations, the paper proposes a set of fiscal measures, including a redistribution of tax revenues and expenditure obligations between the center of a given agglomeration and the region that contains it. The current fiscal mechanisms of stimulating economic development of Russian regions are analyzed. A mechanism of additional stimulation for regions to develop their own revenue base is proposed; it includes the transfer of receipts of VAT levied with a reduced rate of 10 % to regions in exchange for centralization of some part of corporate income tax in the federal budget. Different scenarios of this exchange are analyzed. It is shown that centralization of the corporate income tax amount corresponding to the 1 % rate in the federal budget in exchange for the transfer of VAT levied with a rate of 10 % to regions with a compensation mechanism within the transferred amounts is neutral to the federal budget and to budgets of the regions which receive equalization grants.
Classification-JEL: H71, H72, H74
Keywords: agglomerations, fiscal equalization, regions, regional income, stimulation, intergovernmental fiscal relations, intergovernmental grants, VAT, corporate income tax
Journal: Finansovyj žhurnal — Financial Journal
Pages: 99-113
Issue: 5
Year: 2020
Month: October
DOI: 10.31107/2075-1990-2020-5-99-113
File-URL: https://www.finjournal-nifi.ru/images/FILES/Journal/Archive/2020/5/statii/07_5_2020_v12.pdf
File-Format: Application/pdf 
Handle: RePEc:fru:finjrn:200507:p:99-113