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Finance and Credit
 

The impact of fiscal sharing technique on the financial stability of the Russian Federation regions

Vol. 25, Iss. 9, SEPTEMBER 2019

Received: 26 February 2019

Received in revised form: 3 July 2019

Accepted: 17 July 2019

Available online: 30 September 2019

Subject Heading: FISCAL SYSTEM

JEL Classification: H21, H23, H61, H77

Pages: 2069–2082

https://doi.org/10.24891/fc.25.9.2069

Yashina N.I. Institute of Economics and Entrepreneurship, National Research Lobachevsky State University of Nizhny Novgorod (UNN), Nizhny Novgorod, Russian Federation
yashina@iee.unn.ru

ORCID id: not available

Malyshev S.A. Institute of Economics and Entrepreneurship, National Research Lobachevsky State University of Nizhny Novgorod (UNN), Nizhny Novgorod, Russian Federation
malyshevsa@iee.unn.ru

ORCID id: not available

Chesnokova L.A. Institute of Economics and Entrepreneurship, National Research Lobachevsky State University of Nizhny Novgorod (UNN), Nizhny Novgorod, Russian Federation
chesnokova@iee.unn.ru

ORCID id: not available

Subject This article explores the relationships between the financial stability of the Russian Federation regions and the formation of the revenue part of the Russian budgets, the fiscal sharing between the budget system levels, in particular.
Objectives The article aims to substantiate, using calculated analytical data, that a proposed original algorithm for the allocation of regulatory taxes contributes to the increase in the regions' fiscal sustainability.
Methods For the study, we used generally accepted approaches and formulas for assessing the fiscal sustainability based on the Russian Federal Tax Service website official data.
Results The article forms an adjusted income basis of the Russian entities according to the standards of personal income tax payments to the federal and consolidated budgets of the Russian Federation, income tax, VAT, and excise taxes, determined using the proposed original methodology. The article shows that when applying the new standards, the region fiscal sustainability indicators under study demonstrate positive dynamics and prove that transfers of revenues from regulatory and budget revenue generating taxes can contribute to the self-sufficiency and financial sustainability of regional budgets.
Conclusions The proposed technique of tax allocation increases the region's own income, expenditure commitments coverage, and reduces the dependence on inter-budget transfers, i.e. it improves the financial stability of regional budgets.

Keywords: fiscal sustainability, own earnings, regulatory tax, tax differentiation

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