Baykov, P. M., Koroleva, L. P. Tax Revenues into the Budgets of Urban Districts — Capitals of Finno-Ugrian Self-Governments in the Volga Federal District: Analysis and Proposals for Extension

Abstract: Apart from belonging to the same language group, Finno-Ugrian self-governments of the Volga Federal District of the Russian Federation (the Republic of Mordovia, Mari El and Udmurtia) are all characterized with negative indicators of the economic and demographic development. By the level of the average income, salary and other social indicators all three regions have a rating below average among republics of the Russian Federation and are in a group of outsiders based on their gross regional product, percentage of poor people among the population and the income-to-minimum wage ratio. Taking into account the fact that capitals play the most important role in the regional development, the authors of the present article analyze tax revenues into their budgets in order to assess the level of their financial capacity and whether these capitals can actually be the ‘driving force’ in the development of their regions. This is what makes the analysis of dynamics of tax revenues into the budgets of urban districts — capitals of Finno-Ugrian self-governments in the Volga Federal District so important today. Based on the results of the analysis the authors defined a number of tendencies in dynamics of tax revenues at the analyzed cities including:– the main profitable source of tax revenues is the personal income tax in all three urban districts; — in all analyzed cities the aggregate income tax (single tax on imputed income, single agricultural tax and simplified tax) comes second by their volume and these tax revenues are constantly growing; the relative share of the state tax in the structure of all tax-based budget revenues is rather low compared to the relative share of other federal taxes but comparable to the revenues from local taxes;– the land tax has the largest relative share in the structure of local taxes; and the personal income tax has the minimum share in the structure of tax revenues in all cities being analyzed. Based on the analysis the authors offer particular measures aimed at strengthening financial and economic grounds of the local self-government in the Russian Federation, in particular, to legislatively increase the personal income tax ratio by at least 10 percent; to legislatively assign the local budget share of income tax ratio in the amount of at least 2-3 percent; and to legislatively assign the transport tax ratio for local budgets. The authors also offer directions for the development of the local taxation system.

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