The concept and essence of mobilization elements of tax policy

Mitin Dmitry Alekseevich ORCID: 0000-0002-7639-8794 PhD in Economics Teacher of the Department of Taxes and Tax Administration, Financial University under the Government of the Russian Federation 15 Verkhnyaya Maslovka str., Moscow, 127083, Russia mitin.fns@gmail.com Other publications by this author

Gerasimova Anna Evgenievna ORCID: 0000-0001-8480-6279 PhD in Economics Associate Professor of the Department of Taxes and Tax Administration Financial University under the Government of the Russian Federation 15 Verkhnyaya Maslovka str., Moscow, 127083, Russia AEGerasimova@fa.ru

Introduction

Since 2020, the economy of the Russian Federation has faced serious challenges provoked by the COVID-19 pandemic, restrictions on international trade imposed by individual countries, sanctions pressure from Western countries, as well as the general global economic crisis.

Due to the current situation in the scientific community, discussions have resumed on the need to return to the mobilization economy, which has been repeatedly used in Russia to overcome crisis situations ^[1].

Similar discussions are underway in the political circles of the Russian Federation, for example:

– First Deputy Chairman of the Government of the Russian Federation Andrey Belousov, in an interview with TASS ^[2], called the most likely scenario for the transformation of the Russian economy – the transition to a mobilization economy;

– On October 16, 2023, a meeting on national security in Central Russia was held in Voronezh under the chairmanship of Secretary of the Security Council Nikolai Patrushev. In the speech, in particular, the instruction was given to "ensure the formation of mobilization plans for the economy of the subjects of the Russian Federation and municipalities" ^[3];

– Minister for Integration and Macroeconomics of the Eurasian Economic Commission S.Y. Glazyev also noted in an interview with Vedomosti that "the Russian Federation needs a mobilization economy with market tools" ^[4].

These factors indicate the possible preparation of the Russian Federation for the transition to a mobilization model of economic development.

One of the key elements of the mobilization economy is the tax policy, through which the state ensures the financial stability of the state necessary to achieve the goal of mobilization.

Tax policy has a direct impact on ensuring the revenue side of the state budget, its defense capability, ensuring social obligations, the development of production, as well as the redistribution of resources to priority sectors of the economy.

Taking into account the above, for the practical implementation of tax policy in the Russian Federation in the context of a mobilization economy, it seems important to consider the theoretical aspects of tax policy under this model of economic development, identify its main elements and highlight their features.

The concept of tax policy in the mobilization economy

There is no definition of tax policy in regulatory documents. At the same time, the scientific literature contains quite a lot of different definitions of this concept, but not in the context of the mobilization economy.

The Financial and Credit Encyclopedic Dictionary provides the following definition of tax policy: "Tax policy is a system of measures carried out by the state in the field of taxes, an integral part of fiscal policy" ^[5].

In the textbook "Taxes and Taxation", I.A. Maiburov gives the following definition of tax policy – an integral part of the socio-economic policy of the state, focused on the formation of such a tax system that will stimulate the accumulation and rational use of the national wealth of the country, promote the harmonization of the interests of the economy and society and thereby ensure the socio-economic progress of society ^[6]. Thus, in his definition, the author primarily highlights the social function of taxes for the purposes of tax policy.

V.G. Panskov, highlighting the topic of tax policy, gives a broader definition and defines it as a set of economic, financial and legal measures of the state to form the country's tax system in order to meet the financial needs of the state, individual social groups of society, as well as the development of the country's economy through the redistribution of financial resources ^[7].

N. I. Malis defines tax policy as a system of measures taken by the state in the field of taxes, which is a component of financial policy. The implementation of a specific tax policy is related to the implementation of the fiscal and regulatory function of taxes. Through centralized resources, the state promotes balanced production and structural shifts, supports the social sphere and maintains political stability" ^[8].

In turn, in the collection of the Organization for Economic Cooperation and Development devoted to investment issues, the following definition of tax policy is given – it refers to the guidelines established by the government for setting and collecting taxes. It covers both microeconomic and macroeconomic aspects, with the former focusing on issues of fairness and efficiency of tax collection, and the latter on the total amount of taxes to be collected and its impact on economic activity. The country's tax system is considered to be the most important tool for influencing the country's economy ^[9].

Based on the highlighted definitions of the concept of tax policy, it can be concluded that all the authors identify a regulatory function of tax policy that can affect various spheres of society. Also, most authors in their definitions pay attention to the fact that tax policy is aimed at ensuring the financial needs of the state. It is important to note that in the definition of the OECD experts it is noted that tax policy is regulated not only by microeconomic, but also by macroeconomic aspects, including issues of foreign economic policy.

The specifics of the implementation of tax policy directly depend on the current political, social and economic priorities of the state's development.

Thus, to define the concept of tax policy in a mobilization economy, it is important to highlight the features of the mobilization economy.

Sedov V.V., specializing in issues of mobilization economics, defined this model of economic development as an economy whose resources are concentrated and used to counter threats to the existence of a country and an ethnic group as an integral system ^[10].

The following principles of the mobilization economy are noted:

- used in emergency situations ^[11];

- all the country's resources are directed to one or more priority goals to the detriment of other industries, which violates the harmony of the country's development ^[12];

- ensuring the fullest possible use of available production resources.

Taking into account the highlighted features, it can be determined that the tax policy in the mobilization economy is a set of measures carried out by the state in the field of taxes aimed at ensuring the financial needs of mobilization by redistributing financial resources to the most priority sectors of the economy.

The mobilization tax mechanism of tax policy

The tax policy of the state finds its practical expression through the tax mechanism.

The tax mechanism is a set of rules used in the state for calculating and paying taxes, as well as tools to ensure compliance with tax legislation.

The tax mechanism includes the tools with which the state implements tax policy. As a rule, they are distinguished as tools of the tax mechanism ^[13]:

a) the tax rate;

b) tax benefit;

c) the tax base;

d) tax sanction.

To determine the specifics of the tax mechanism of tax policy in a mobilization economy, it is advisable to highlight its fundamental principles.

Based on the analysis of historical experience, as well as the works of leading scientists in the field of tax policy, the following principles of tax policy in the mobilization economy are highlighted in table 1.

Table 1 – Principles of tax policy in the mobilization economy

Source: compiled by the author

In addition, to highlight the features of the tax mechanism in the mobilization economy, it is important to refer to the historical experience of the Soviet Union, in whose tax policy significant changes took place in the period 1941-1945 ^[14].

At the beginning of the war, turnover tax revenues in the country significantly decreased: in 1940 – 105.9 billion rubles (58% of the budget), in 1942 – 66.4 billion rubles. (40,2%). With the streamlining of the industry, it began to rise and in 1945 it already amounted to 123.1 billion rubles. The leading role in increasing the turnover tax was played by reducing production costs (by 30-50% during the years of the Great Patriotic War) ^[15].

Basic taxes began to increase from the first days of the war. In fact, a progressive scale of taxation on personal income was introduced, depending on the category of payer: workers and employees, other payers. At the same time, additional differentiation was introduced within each of these categories, depending on the payer's attitude to active military service or conscription into the army upon mobilization.

In addition, additional taxes were introduced, for example, a tax on bachelors ^[16], which applied to men who had reached the age of 20 and did not have children. A "war tax" was also introduced to cover the needs of the army.

It is important to note that the powers of local authorities have been expanded, which have been given the right to introduce additional taxes and benefits.

If we summarize the mobilization measures, the following changes occurred in the tax policy of the Soviet Union ^[17]:

- taxes and various fees from the population have increased significantly (payments to the budget increased from 19.2 billion rubles in 1940 to 44.9 billion rubles in 1942);

- the circle of taxpayers has expanded mainly due to the involvement of persons who do not have their own income, i.e. dependents, in paying taxes;

- the tax base was taken into account more fully, in particular, the income of peasants from selling their products on the market at increased prices;

- the principle of collecting some taxes has changed (for example, when the military tax was introduced in 1942, the long-forgotten principle of the poll tax was used, which greatly simplified its administration) ^[18].

At the same time, it is important to take into account that the tools of the tax mechanism of the tax policy of the Soviet Union in the period 1941-1945 were set up for a wartime regime, within which the future fate of the existence of the state was decided. In addition, the Soviet Union used the command economy of an industrial society.

Given the absence of similar challenges at the present time, as well as the predominance of market models of the economy, it seems that the tools of the tax mechanism of modern tax policy in a mobilization economy should maintain a market character and be aimed primarily at overcoming economic shocks.

Taking into account the above in Table 2, the parameters of the tax policy instrument in the mobilization economy are proposed

Table 2 – Proposed parameters of the instrument of the tax mechanism in the mobilization economy

Source: compiled by the author

As can be seen from the table below, the tax mechanism in the mobilization economy is characterized by an expanded set of tools with special parameters necessary to achieve the goals of mobilization. The specific set of tools of the tax mechanism will depend on the actual circumstances of mobilization, as well as the challenges facing the country's economy. At the same time, the main difference between the tax mechanism in the mobilization economy and other forms of economic development of the state is its focus on mobilizing all available resources and redirecting them to the most priority sectors of the economy.

Comparison of tax regulation tools for different models of economic development of economic macro systems

In order to comprehensively analyze tax policy in a motivational economy and highlight its fundamental differences, it seems important to compare it with other models of economic development.

As noted earlier, the practical expression of tax policy is carried out through a tax mechanism, which is a set of parameters of the tax system that allow the state to achieve its development goals. Thus, the tax mechanism is essentially a tool for tax regulation. According to this parameter, a comparison of different types of economic models of state development will be carried out.

Kukina E.E. and Makarov I.N. in their study on the tax and budgetary regulation of territorial and sectoral development in the context of a mobilization economy ^[23] compared and highlighted the features of the economic systems of countries according to various parameters. At the same time, the features of such a comparison parameter as the tools of tax regulation in the conditions of a mobilization economy were not highlighted.

Using the approach proposed by these authors, Table 3 highlights the features of tax regulation in the mobilization economy.

Table 3 – Features of tax regulation in various models of economic development of economic macro-systems.

Source: compiled by the author on the basis of ^[23]

Mobilization elements of tax policy

Summing up the results of the analysis, we will highlight the main elements of tax policy in the mobilization economy.

The following elements of tax policy are distinguished in the scientific literature ^[24]: purpose, directions, tasks, methods, types (forms), tools.

Taking into account the conclusions reflected in this study, the main elements of tax policy are highlighted in table 4.

Table 4 Mobilization elements of tax policy and their characteristics

Source: compiled by the author

Conclusion

Thus, taking into account various factors indicating a possible transition of the Russian economy to a mobilization model, the article conducted:

– a comprehensive analysis of the theoretical aspects of the state's tax policy;

– the historical experience of the mobilization tax policy of the Soviet Union for the period 1941-1945 is analyzed;

– the principles of building a mobilization model of tax policy have been formed;

– the parameters of the tax policy instrument in the mobilization economy are proposed, preserving mainly the market principles of its implementation;

– a comparison of the tools of tax regulation for various types of macroeconomic models has been carried out;

– the mobilization elements of modern tax policy are highlighted and characterized.

It is important to note that at present, the main goal of tax policy in the event of the transition of the Russian Federation to a mobilization model of the economy should not be to ensure additional tax revenues to the budget, but to overcome the economic shock caused by sanctions and contribute to the restructuring of the country's economy taking into account new realities.