Economic growth and dynamics of the tax potential of the region (on the example of the Republic of Dagestan)

One of the strategic goals of the socio-economic development of any region, like the country as a whole, is the creation of a steadily developing economy. This goal involves increasing tax revenues in the regional budget structure and redistributing budget funds, increasing the efficiency of the production process, ensuring the dynamic development of the economy and raising the standard of living of the population. All this ultimately leads to an increase in the rate of economic growth in the region.

The tax system of the Republic of Dagestan holds a leading position in creating new economic relations and ensures financial and economic stability in the country. The stability of the tax system depends on the scale of how the federal entity takes into account the internal tax potential as an economic component. In order to increase budget revenues in the region, it is necessary to determine the growth reserves for tax revenues, which can be identified using the indicator of the tax potential of the region. [3] The increase in this indicator makes it possible to achieve financial stability in the region’s economy.

So in order to increase the federal budget revenues from tax revenues, Russian President Vladimir Putin signed a law that provides for an increase in the value-added tax (VAT) from 18% to 20%, as well as new tariffs for social contributions. VAT was chosen because it is the easiest to collect. According to authorities, this will provide an opportunity to increase federal budget revenues by 620 billion rubles. The main reason for the maintenance of such a law was the decline in oil prices from $ 110 to $ 76 and, accordingly, this led to a reduction in oil revenues in the GDP structure of the country. Thus, with an increase in VAT, inflation in the country may increase to 4–4.5% and thus stimulate the Central Bank to raise the key rate.

Consider the structure of tax revenues in the budget of the Republic of Dagestan for January-October 2018 (Table 1). [2]

Table 1

"The structure of tax revenues in the budget of the Republic of Dagestan in January-October 2018"

So, from this table, we note that the income tax in October 2018 increased by 1.6% compared with the same period in 2017 and amounted to 3,973.10 million rubles. And the share of VAT in the structure is 15.6%, [2] the share of personal income tax - 37.8%. Note that a tangible increase in tax collection can be achieved if the tax potential of the republic is used rationally.

The structure of the tax potential of the region is an indicator of positive economic growth and allows us to give an objective assessment of the results of the activities of the regional government in the framework of the strategy of socioeconomic development and a number of other programs. It also makes it possible to objectively evaluate the work of the federal tax service and the effectiveness of its fiscal policy.

Achieving an increase in the tax potential of a region is possible through: 1) improving the system of tax collection and the fiscal policy of tax authorities; 2) improving the investment and innovation climate; 3) effective industrial policy; 4) legalization of business. [four]

List of sources used:

• 1.    Suleymanov M.M. Taxes and financial law. 2012. No. 4. P. 343–347;

• 2.    Federal Tax Service of the Republic of Dagestan // Structure of the revenues of the main administered revenues by level of the budget of the Russian Federation for January-October 2018. [Electronic resource]. Access mode: URL: https://analytic.nalog.ru/portal/index.ru-RU.htmГоравский И.В.

• 3.    Tax potential in the mechanism of intergovernmental relations // Finance. 2017. No. 6. P. 27-30;3.

• 4.    Tagirov K. T. Factors of realizing the potential of economic development of a region (on the example of the Republic of Dagestan) // State and municipal management. Scientific notes of SKAGS. 2016. № 4

"Экономика и социум" №1(56) 2019