How the 2020 pandemic affected tax revenues in Russian regions?

Authors

DOI:

https://doi.org/10.24136/eq.2021.009

Keywords:

2020 pandemic, tax revenues, region, resilience, factors

Abstract

Research background: The 2020 pandemic has proven to be stressful for regional tax systems. However, these systems reacted differently to lockdown and a decline in business activity, which was associated with both their structures and the specifics of their development.

Purpose of the article: The aim of the article is to assess the impact of the 2020 pandemic on tax revenues of Russian regions, as well as to analyze the factors contributing to the resilience of regional tax systems to epidemiological crises.

Methods: The study is based on monthly data from the Federal Tax Service of the Russian Federation on total tax revenues in 83 Russian regions for 2013?2020. For data up to March 2020, we construct stationary time series and plotted ARiMA regressions. Based on them, we forecast tax revenues for the period from April to December 2020, if there were no pandemic. The impact of the pandemic is calculated as the deviation of actual tax revenue from the forecast for the corresponding 9 months.

Findings & value added: We find that the impact of the pandemic on tax revenues varies over time and space. The crisis hit the fiscal system most negatively in the first three full months of the lockdown (April?June 2020). Some mining regions of the Urals, Western and Eastern Siberia, specializing in the extraction of oil and gas, as well as non-ferrous metals, turned out to be the most vulnerable to the pandemic. The most resistant to it are the central and southern regions of the European part of Russia. Calculation of Pearson's correlations shows that the greatest drop in tax revenues occur in regions with a larger share of the mining industry in gross value added and MET in tax revenues, with a higher GRP per capita and an increased level of general economic instability. The smallest decline in tax revenue, or even its growth, is observed in regions with a larger share of personal income tax and property tax in tax revenues, a higher share of trade and processing industries, social sphere and public administration in gross value added, a higher degree of economic diversification and a larger share of small business in total turnover. The obtained results are applicable to manage the resilience of tax systems to epidemiological crises.

Downloads

Download data is not yet available.

References

Clemens, J., & Veuger, S. (2020). Implications of the Covid-19 pandemic for state government tax revenues. National Tax Journal, 73(3), 619?644. doi: 10.17310 /ntj.2020.3.01. DOI: https://doi.org/10.17310/ntj.2020.3.01
View in Google Scholar

Chernick, H., Copeland, D., & Reschovsky, A. (2020). The fiscal effects of the covid-19 pandemic on cities. An initial assessment. National Tax Journal, 73(3), 699?732. doi: 10.17310/ntj.2020.3.04. DOI: https://doi.org/10.17310/ntj.2020.3.04
View in Google Scholar

Cornia, G. C., & Nelson, R. D. (2010). State tax revenue growth and volatility. Federal Reserve Bank of St. Louis Regional Economic Development, 6(1), 23?58.
View in Google Scholar

Dai, R., Feng, H., Hu, J., Jin, Q., Li, H., Wang, R., Wang, R., Xu, L., & Zhang, X. (2021). The impact of COVID-19 on small and medium-sized enterprises (SMEs): evidence from two-wave phone surveys in China. China Economic Review, 67, 101607. doi: 10.1016/j.chieco.2021.101607. DOI: https://doi.org/10.1016/j.chieco.2021.101607
View in Google Scholar

Darougheh, S. (2021). Dispersed consumption versus compressed output: assessing the sectoral effects of a pandemic. Journal of Macroeconomics, 103302. doi: 10.1016/j.jmacro.2021.103302. DOI: https://doi.org/10.1016/j.jmacro.2021.103302
View in Google Scholar

Devereux, M. P., Güçeri, ?., Simmler, M., & Tam, E. H. F. (2020). Discretionary fiscal responses to the COVID-19 pandemic. Oxford Review of Economic Policy, 36(1), S225?S241. doi: 10.1093/oxrep/graa019. DOI: https://doi.org/10.1093/oxrep/graa019
View in Google Scholar

Dissart, J. C. (2003). Regional economic diversity and regional economic stabil-ity: research results and agenda. International Regional Science Review, 26(4), 423?446. doi: 10.1177/0160017603259083. DOI: https://doi.org/10.1177/0160017603259083
View in Google Scholar

Giannakis, E., & Bruggeman, A. (2019). Regional disparities in economic resilience in the European Union across the urban?rural divide. Regional Studies, 54(2), 1200?1213. doi: 10.1080/00343404.2019.1698720. DOI: https://doi.org/10.1080/00343404.2019.1698720
View in Google Scholar

Goswami, B., Mandal, R., & Nath, H. K. (2021). Covid-19 pandemic and economic performances of the states in India. Economic Analysis and Policy, 69, 461? 479. doi:10.1016/j.eap.2021.01.001. DOI: https://doi.org/10.1016/j.eap.2021.01.001
View in Google Scholar

Hac?o?lu-Hoke, S., Känzig, D. R., & Surico, P. (2021). The distributional impact of the pandemic. European Economic Review, 134, 103680. doi: 10.1016/j.eu roecorev.2021.103680. DOI: https://doi.org/10.1016/j.euroecorev.2021.103680
View in Google Scholar

Jena, P. R., Majhi, R., Kalli, R., Managi, S., & Majhi, B. (2021). Impact of COVID-19 on GDP of major economies: application of the artificial neural network forecaster. Economic Analysis and Policy, 69, 324?339. doi: 10.1016/j. eap.2020.12.013. DOI: https://doi.org/10.1016/j.eap.2020.12.013
View in Google Scholar

Kolomak, E. (2020). Economic effects of pandemic-related restrictions in Russia and their spatial heterogeneity. R-Economy, 6(3), 154?161. doi: 10.15826/reco n.2020.6.3.013. DOI: https://doi.org/10.15826/recon.2020.6.3.013
View in Google Scholar

Kuznetsova, O. V. (2020). Vulnerability of regional economies? structure in crisis conditions. Federalism, 2(98), 20?38. doi: 10.21686/2073-1051-2020-2-20-38. DOI: https://doi.org/10.21686/2073-1051-2020-2-20-38
View in Google Scholar

Lagravinese, R., Liberati, P., & Sacchi, A. (2018). The growth and variability of regional taxes: an application to Italy. Regional Studies, 52(3), 416?429. doi: 10.1080/00343404.2017.1313400. DOI: https://doi.org/10.1080/00343404.2017.1313400
View in Google Scholar

Mai, X., Chan, R. C. K., & Zhan, C. (2019). Which sectors really matter for a resil-ient Chinese economy? A structural decomposition analysis. Sustainability, 11, 6333. doi: 10.3390/su11226333. DOI: https://doi.org/10.3390/su11226333
View in Google Scholar

Malkina, M. Y. (2020?). Assessment of resilient development of the regional economies based on Mahalanobis distances. Terra Economicus, 18(3), 140?159. doi: 10.18522/2073-6606-2020-18-3-140-159. DOI: https://doi.org/10.18522/2073-6606-2020-18-3-140-159
View in Google Scholar

Malkina, M. Y. (2020b). Assessment of the sustainability of budget revenues in the regions of the Russian Federation. Journal of Siberian federal university. Humanities and Social Sciences, 13(4), 547?559. doi: 10.17516/1997-1370-0588. DOI: https://doi.org/10.17516/1997-1370-0588
View in Google Scholar

Malkina, M. Y. (2017). Influence of the industrial structure of economy on the risk level of Russian regions' tax systems. Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 65(6), 2025?2035. doi: 10.11118/actaun20 1765062025. DOI: https://doi.org/10.11118/actaun201765062025
View in Google Scholar

Martin, R. (2012). Regional economic resilience, hysteresis and recessionary shocks. Journal of Economic Geography, 12(1), 1?32. doi: 10.1093/jeg/lbr019. DOI: https://doi.org/10.1093/jeg/lbr019
View in Google Scholar

Mau, V. A. (Ed.) (2020). Society and pandemic: experience and lessons from COVID-19 fighting in Russia. Moscow: RANEPA.
View in Google Scholar

Minakir, P. A. (2020). Pandemic economy: the Russian way. Prostranstvennaya Ekonomika = Spatial Economics, 16(2), 7?18. doi: 10.14530/se.2020.2.007-018. DOI: https://doi.org/10.14530/se.2020.2.007-018
View in Google Scholar

Modica, M., & Reggiani, A. (2015). Spatial economic resilience: overview and perspectives. Networks and Spatial Economics, 15, 211?233. doi: 10.1007/s110 67-014-9261-7. DOI: https://doi.org/10.1007/s11067-014-9261-7
View in Google Scholar

Pietro, F. D., Lecca, P., & Salotti, S. (2020). Regional economic resilience in the European Union: a numerical general equilibrium analysis. Spatial Economic Analysis. Advance online publication. doi: 10.1080/17421772.2020.1846768. DOI: https://doi.org/10.1080/17421772.2020.1846768
View in Google Scholar

Shafi, M., Liu, J., & Ren, W. (2020). Impact of COVID-19 pandemic on micro, small, and medium-sized enterprises operating in Pakistan. Research in Globalization, 2, 100018. doi: 10.1016/j.resglo.2020.100018. DOI: https://doi.org/10.1016/j.resglo.2020.100018
View in Google Scholar

Tan, J., Lo, K., Qiu, F., Liu, W., Li, J., & Zhang, P. (2017). Regional economic resilience: resistance and recoverability of resource-based cities during economic crises in Northeast China. Sustainability, 9, 2136. doi: 10.3390/su912 2136. DOI: https://doi.org/10.3390/su9122136
View in Google Scholar

Van Bergeijk, P. A. G., Brakman, S., & Van Marrewijk, C. (2017). Heterogeneous economic resilience and the great recession?s world trade collapse. Papers in Regional Science, 96(1), 3?12. doi: 10.1111/pirs.12279. DOI: https://doi.org/10.1111/pirs.12279
View in Google Scholar

Zubarevich, N. V., & Safronov, S. G. (2020). Regions of Russia in the acute phase of the COVID crisis: differences from previous economic crises of the 2000s. Regional'nye issledovaniya = Regional studies, 2(68), 4?17. doi: 10.5922/1994-5280-2020-2-1. DOI: https://doi.org/10.5922/1994-5280-2020-2-1
View in Google Scholar

Downloads

Published

30-06-2021

Issue

Section

Articles

How to Cite

Malkina, M. Y. (2021). How the 2020 pandemic affected tax revenues in Russian regions?. Equilibrium. Quarterly Journal of Economics and Economic Policy, 16(2), 239-260. https://doi.org/10.24136/eq.2021.009

Similar Articles

21-30 of 208

You may also start an advanced similarity search for this article.