Content №4 от 2024
Tax Revenues in the Russian Federation: Sectoral and Regional Structural Shifts
In the current geopolitical climate, with heightened risks and threats related to foreign economic activity, the importance of understanding tax revenue sources, their regional distribution, and sectoral diversification has increased significantly. Along with economic development, the movement of revenues to the budget system is influenced by the level of the tax burden. This study aims to assess the evolution of tax revenues and identify the factors driving their dynamics and changes in sectoral and territorial structures, as administered by the Federal Tax Service.
The analysis reveals that from 2010 to 2022, the growth rate of Russia’s gross regional product (GRP), even when measured in current prices, steadily declined until 2020. Tax revenue trends closely mirrored this economic performance. A sharp decline in budget system resources was averted after 2018 due to a marked increase in the tax burden. Of all the growth in the budget system’s revenue, 10% was attributed to the increased tax burden, while GRP dynamics drove 90%.
Significant structural shifts that shape the scale and trajectory of the country’s budget revenues are concentrated in a relatively small group of regions. About a quarter of the regions with the highest share of total revenues account for around 80% of Federal Tax Service revenues (on average from 2010 to 2022). Sectors such as trade and certain manufacturing sub-sectors typically demonstrate a higher-than-average return on sales and relatively low tax burden assessments. These sectors, therefore, warrant closer scrutiny to explore opportunities for increasing tax revenue in both the short and medium term.
