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Priorities of the Russian business environment: The Gini index, personal income tax and key interest rate

Vol. 25, Iss. 1, JANUARY 2019

PDF  Article PDF Version

Received: 22 August 2018

Received in revised form: 5 September 2018

Accepted: 19 September 2018

Available online: 29 January 2019

Subject Heading: BUSINESS VALUE

JEL Classification: F20, F43, H25, M20

Pages: 211–227

https://doi.org/10.24891/fc.25.1.211

Smirnov V.V. I.N. Ulianov Chuvash State University, Cheboksary, Chuvash Republic, Russian Federation
v2v3s4@mail.ru

https://orcid.org/0000-0002-6198-3157

Mulendeeva A.V. I.N. Ulianov Chuvash State University, Cheboksary, Chuvash Republic, Russian Federation
alena-mulendeeva@yandex.ru

ORCID id: not available

Subject The article analyzes opportunities and priorities for the Russian business environment development.
Objectives The aim is to identify the impact of the main factors shaping the Russian business environment and increasing the entrepreneurial activity.
Methods The study rests on the systems approach, using the elements of cluster and graphical analysis.
Results We found that a significant number of the poor contributes to a decrease in the effective demand, and in combination with a flat rate of personal income tax and increased taxes on land and property of individuals – to a reduction in investment and savings. At the same time, the high value of the Gini index is not an encumbrance for the development of the business environment. We revealed the leading role of the Bank of Russia in the formation of business environment. Through changing the key interest rate, it will shift priorities from the effective demand, investments and savings to the stability of the banking system, profits of the banking sector, exporters and importers.
Conclusions It is necessary to change the existing priorities for the Gini index, the personal income tax and the key interest rate. It is critical to start with the monetary policy of the Bank of Russia, the key interest rate, by raising the effective demand and stimulating investment. The next stage is to replace the flat rate of the personal income tax by a progressive scale, to reduce the tax on land and property of individuals.

Keywords: business environment, Gini index, cluster analysis, key interest rate, income tax

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