Relationship of taxation with regional and social differentiation in Russia: assessment approach based on tax indicators

In contemporary Russia, the problems of regional and social differentiation and the search for ways to overcome them are quite acute, one of which may be the development of the potential of tax instruments to smooth inequality. The purpose of the research is to determine the tax indicators of inequality of Russia’s regions in terms of personal income tax receipts to assess the relationship of income taxation with regional and social differentiation. The scientifi c knowledge increment in the framework of this study consists in developing and testing an approach to assessing the differentiation rate of Russian regions and citizens based on concentration and variation indicators for per capita tax revenues, which are tax indicators of citizens’ income inequality and inequality of Russia’s entities in personal income tax receipts. As part of the study using the Data Analysis package of the MS Excel spreadsheet processor, we have calculated 7 indicators of differentiation, concentration and variation for 85 regions over 16 years from 2006 to 2021 based on data from Rosstat and the Federal Tax Service of the Russian Federation. As a result, we have formed a single Data set, including about 10 thousand indicators. The calculation and analysis of tax indicators allowed proving that the personal income tax in Russia does not smooth out the citizens’ income inequality, but, on the contrary, strengthens it. In the regional context, the citizens’ inequality is more pronounced due to the signifi cant differentiation of Russia’s entities. From the standpoint of smoothing the citizens’ income inequality, as well as regional differentiation in tax revenues, such measures in the fi eld of income taxation as strengthening the progression of personal income tax, the introduction of a tax-free minimum, adjusting the system of tax deductions, the transition to the payment of personal income tax at the place of registration of the taxpayer may be appropriate. The search for effective tools to overcome inequality in Russia opens up broad prospects for further research.