M. A. Pechenskaya-Polishchuk, M. K. Malyshev Key Factors Affecting the Corporate Tax Levied from Russian Ferrous Metallurgy Corporations to Regional Budgets

UDК 336.226.1:669

DOI: https://doi.org/10.15507/2413-1407.114.029.202101.010-036

Introduction. The processes of budgetary destabilization in Russia, especially at the regional level, have become protracted, which means that ways to overcome them should be devised. A considerable part of the budgetary problems of the regions is associated with the shortcomings of the tax policies, in particular, with the component related to the taxation of profits of large companies. The purpose of the article is to reveal the factors influencing the volume of corporate tax revenues to regional budgets from Russian ferrous metallurgy corporations, on the basis of the results of the study conducted.

Materials and Methods. Data from the Federal Tax Service in the Vologda, Chelyabinsk and Lipetsk Regions and from the Federal State Statistics Service were analyzed, as well as the reports on the financial and production performance and annual reports of such metallurgical corporations as Severstal, MMK, and NLMK. Both the horizontal (dynamic) analysis, showing changes in indicators, and the vertical (weight) analysis, revealing the role of each indicator of financial performance, was performed. Content analysis made it possible to identify the cause-and-effect relationships of changes in the dynamics and structure of indicators.

Results. The study has revealed the imperfection of the regulatory and legal instruments currently in force in Russia in relation to large taxpayers. First of all, this concerns the amount of the corporate tax, which was negatively influenced by the peculiarities of the dividend policies of enterprises and the volumes of commercial and administrative expenses. The depreciation of the national currency had a positive impact on the export proceeds, which led to a twofold increase in the total ruble gains of all enterprises under study on average, but not to a corresponding increase in the amount of the corporate tax revenues to the budget.

Discussion and Conclusion. Taking into account the identified factors will make it possible to further substantiate measures to increase the efficiency of state’s taxation policies in relation to large business, which is necessary to mobilize corporate tax revenues to the country's budget system and to develop its territories. The results of this study will be useful for public authorities responsible for making decisions in the field of interaction with business entities.

Keywords: large business, financial performance, ferrous metallurgy, regional economy, corporate tax, budget system, corporate finance

Funding. The article was done in pursuance of the state task for the Vologda Research Center of the Russian Academy of Sciences as part of the research work No. 0168-2019-0005 “Research on Factors and Methods of Sustainable Development of Territorial Systems in Changing Geopolitical and Geoeconomic Circumstances”.

The authors declare that there is no conflict of interest.

For citation: Pechenskaya-Polishchuk M.A., Malyshev M.K. Key Factors Affecting the Corporate Tax Levied from Russian Ferrous Metallurgy Corporations to Regional Budgets. Regionology = Russian Journal of Regional Studies. 2021; 29(1):10-36. DOI: https://doi.org/10.15507/2413-1407.114.029.202101.010-036

REFERENCES

1. Povarova A.I. Socio-Economic Condition of the Regions Specializing in Metallurgy: 2011 Results. Ehkonomicheskie i sotsialnye peremeny: fakty, tendentsii, prognoz = Economic and Social Changes: Facts, Trends, Forecast. 2012; (4):75-85. Available at: http://esc.vscc.ac.ru/article/320 (accessed 18.07.2020). (In Russ., abstract in Eng.)

2. Ilyin V.A., Povarova A.I. Consolidated Taxation and Its Consequences for Regional Budgets. Ehkonomika regiona = Economy of Region. 2019; 15(1):70-83. (In Russ., abstract in Eng.) DOI: https://doi.org/10.17059/2019-1-6

3. Povarova A.I. Metallurgical Regions: Key Trends and Socio-Economic Development Issues. Problemy razvitiya territorii = Problems of Territory’s Development. 2015; (6):37-50. Available at: http://pdt.vscc.ac.ru/article/1655 (accessed 18.07.2020). (In Russ., abstract in Eng.)

4. Zavyalova Z.M., Vygolova I.N. Ways to Achieve Financial Efficiency of an Enterprise. Izvestiya Orenburgskogo gosudarstvennogo agrarnogo universiteta = Izvestia Orenburg State Agrarian University. 2009; (21):118-121. Available at: https://orensau.ru/ru/nauka/izvestiya-orenburgskogo-gau (accessed 18.07.2020). (In Russ.)

5. Endovitskiy D.A. Formation and Analysis of the Organization’s Profit Indicators. Ehkonomicheskij analiz: teoriya i praktika = Economic Analysis: Theory and Practice. 2004; (11):14-25. Available at: https://www.fin-izdat.ru/journal/analiz/oldlist.php?SECTION_ID=783 (accessed 18.07.2020). (In Russ.)

6. Belogorskaya A.N., Sorokina E.V., Teterina N.A. Regional Tax Revenue Forming Factors. Vestnik RUK = Vestnik of the Russian University of Cooperation. 2016; (4):19-26. Available at: http://cheb.ruc.su/upload/Cheboksary/Вестник_4(26)2016.pdf (accessed 18.07.2020). (In Russ., abstract in Eng.)

7. Dedova O.V. Principles of Formation and Account of Financial Results. Vestnik Bryanskogo gosudarstvennogo universiteta = The Bryansk State University Herald. 2009; (3):97-102. Available at: http://vestnik-brgu.ru/wp-content/numbers/v2009_3.pdf (accessed 18.07.2020). (In Russ.)

8. Yasmenko T.N. Formation of Financial Results in Modern Conditions. Vse dlya bukhgaltera = Everything for an Accountant. 2007; (15):13-17. Available at: https://www.elibrary.ru/item.asp?id=9510453 (accessed 18.07.2020). (In Russ.)

9. Uskova I.A., Turievskaya O.V. Analysis of the Influence of Factors on the Formation of the Amount of the Calculated Corporation Tax of Organizations- Largest Taxpayers. Territoriya nauki = Territory of Science. 2017; (6):179-183. Available at: https://www.elibrary.ru/item.asp?id=32762962 (accessed 18.07.2020). (In Russ.)

10. Nikonova I.Yu. Influence of Accounting Policy on Formation of Financial Results. Izvestiya Irkutskoj gosudarstvennoj ehkonomicheskoj akademii = Izvestiya of Irkutsk State Economics Academy. 2012; (4):1-5. Available at: http://brj-bguep.ru/reader/article.aspx?id=13836 (accessed 18.07.2020). (In Russ., abstract in Eng.)

11. Fadeeva V.V., Sernova O.O. Formation of Financial Results in Domestic and International Practice. E-Scio. 2019; (3):150-154. Available at: http://e-scio.ru/wp-content/uploads/2019/05/E-SCIO-3_2019.pdf (accessed 18.07.2020). (In Russ.)

12. Kurmanova A.Kh. Principles of Formation of the Report on Financial Results in Domestic and Foreign Practice. Mezhdunarodnyj bukhgalterskij uchet = International Accounting. 2014; (11):43-54. Available at: https://www.fin-izdat.ru/journal/interbuh/detail.php?ID=61081 (accessed 18.07.2020). (In Russ., abstract in Eng.)

13. Cherkasova E.S. Formation of the Financial Results in Accordance with the Russian Accounting System and International Standards of Financial Statements. Sovremennye nauchnye issledovaniya i innovatsii = Modern Scientific Researches and Innovations. 2017; (4). Available at: http://web.snauka.ru/issues/2017/04/80986 (accessed 23.06.2020). (In Russ., abstract in Eng.)

14. Creedy J., Gemmell N. Corporation Tax Asymmetries: Effective Tax Rates and Profit Shifting. International Tax and Public Finance. 2011; 18:422-435. (In Eng.) DOI:  https://doi.org/10.1007/s10797-011-9165-0

15. Park J., Lee Y. Corporate Income Taxes, Corporate Debt, and Household Debt Additional Contact Information. International Tax and Public Finance. 2019; 26:506-535. (In Eng.) DOI:  https://doi.org/10.1007/s10797-018-9513-4

16. Reito F., Spagano S. Joint Liability Taxation and Group Auditing. Economia Politica. 2017; 34:305-327. (In Eng.) DOI:  https://doi.org/10.1007/s40888-016-0043-1

17. Auerbach A.J. Why Have Corporation Tax Revenues Declined? Another Look. CESifo Economic Studies. 2007; 53(2):1-19. (In Eng.) DOI:  https://doi.org/10.1093/cesifo/ifm008

18. Bartelsman E.J., Beetsma R.M.W.J. Why Pay More? Corporate Tax Avoidance Through Transfer Pricing in OECD Countries. Journal of Public Economics. 2003; 87:2225-2252. (In Eng.) DOI:  https://doi.org/10.1016/S0047-2727(02)00018-X

19. Overesch M., Rincke J. What Drives Corporate Tax Rates Down? A Reassessment of Globalization, Tax Competition, and Dynamic Adjustment to Shocks. The Scandinavian Journal of Economics. 2011; 113(3):579-602. (In Eng.) DOI:  https://doi.org/10.1111/j.1467-9442.2011.01650.x

20. Pechenskaya M.A. The Region and the Federal Center: The State and Assessment of the Effectiveness of Budget Relations. Аudit i finansovyj analiz = Audit and Financial Analysis. 2013; (5):397-404. Available at: https://auditfin.com/fin/2013/5/2013_V_10_14.pdf (accessed 18.07.2020). (In Russ.)

21. Malyshev M.K. On the Social Responsibility of Big Business (Case Study of PAO “Severstal”). Sotsialnoe prostranstvo = Social Area. 2020; 6(1). (In Russ., abstract in Eng.) DOI:  https://doi.org/10.15838/sa.2020.1.23.5

22. Pechenskaya M.A. The Level of Budgetary and Tax Competence of Areas. Regionalnaya ehkonomika: teoriya i praktika = Regional Economics: Theory and Practice. 2016; (10):101-114. Available at: https://www.fin-izdat.ru/journal/region/detail.php?ID=69787 (accessed 23.06.2020). (In Russ., abstract in Eng.)

Submitted 21.07.2020; approved after reviewing 30.10.2020; accepted for publication 09.11.2020.

About the authors:

Mariya A. Pechenskaya-Polishchuk, Head of the Laboratory for Research on the Development of Public Finance, Senior Research Officer, Vologda Research Center of the Russian Academy of Sciences (56a Gorkogo St., Vologda 160014, Russian Federation), Ph. D. (Economics), ORCID: https://orcid.org/0000-0002-6067-2103, marileen@bk.ru

Mikhail K. Malyshev, Research Engineer, Department of Issues of Socio-Economic Development and Management in Territorial Systems, Vologda Research Center of the Russian Academy of Sciences (56a Gorkogo St., Vologda 160014, Russian Federation), ORCID: https://orcid.org/0000-0003-1311-1888, mmk1995@mail.ru

Contribution of the authors:

M. A. Pechenskaya-Polishchuk – academic supervision; project administration; critical analysis and revision of the text of the article.

M. K. Malyshev – collection of data and evidence; formalized data analysis; presentation of data in the text; preparation of the initial version of the text.

The authors have read and approved the final version of the manuscript.
To download article