Nikitkova, U. O. Concerning the Efficiency of Local Taxation

Abstract: The author of the article analyzes problems arising in taxation based on local taxes and offers particular solutions of these problems in order to raise independency of local budgets. Efficiency of local tax exemptions has been the issue of concern in tax legislation up to the present. Recommendations made by the author are aimed at achieving economic benefit in a region and reducing the amount of subsidies usually received by municipal governments. In order to achieve financial stability of municipal governments and increase the interest of the federal government in developing regions, it is necessary to provide an integrative approach to improving the taxation system at the local level. One of the author’s suggestions is to systematize local tax exemptions granted by both federal and local authorities. In May 2013 the Government of the Russian Federation approved of the ‘Main trends in taxation policy for 2014 and for the target period of 2015 and 2016’. This document provides for further improvement of the system of local tax exemptions and increase of tax administration efficiency. In order to consolidate the profits tax base, it is necessary to reform exemptions that do not have any economic effect and do not contribute to the improvement of taxable capability of regions.

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