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Improvement of small business taxation in the Russian Federation

Author

Listed:
  • Belev Sergey

    (Gaidar Institute for Economic Policy)

  • Vekerle Konstantin

    (RANEPA)

  • Evdokimova A.

    (Northwestern University)

  • Krasnoselskikh Aleksander

    (RANEPA)

Abstract

The criteria of determining a small business requires careful analysis for developing tax policy. In this work an international analysis of tax regimes for small businesses was carried out. As part of this analysis, similarities and differences with Russian practice of small business taxation were identified. Small enterprises and self-employed in Russia are less subject to tax control than large enterprises, which is reflected in the lower probability of revealing hidden income. As a result of the analysis, it was revealed that the share of hidden income is approximately 15-25% of the actual income. Analysis of the demography of enterprises for the period 2010-2019 showed that in the vicinity of the revenue thresholds that determine the right to use the loyal tax system, there is an increase in the distribution density to the left of the threshold values. This suggests that representatives of small businesses are striving to make tax optimization by using the loyal tax system. This is especially noticeable for firms that are just entering the market.

Suggested Citation

  • Belev Sergey & Vekerle Konstantin & Evdokimova A. & Krasnoselskikh Aleksander, 2020. "Improvement of small business taxation in the Russian Federation," Working Papers wpaper-2022-1179, Gaidar Institute for Economic Policy, revised 2020.
    • Handle: RePEc:gai:wpaper:wpaper-2022-1179
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    File URL: https://www.iep.ru/files/RePEc/gai/wpaper/wpaper-2022-1179.pdf
    File Function: Revised Version, 2023
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    More about this item

    Keywords

    Russian economy; small business; small business taxation; tax avoidance;
    All these keywords.

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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