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24ФИНАНСЫ, ДЕНЕЖНОЕ ОБРАЩЕНИЕ И
КРЕДИТ
TAX ADMINISTRATION AND BUSINESS ENVIRONMENT
IN THE REPUBLIC OF ARMENIA 1 2 Harutyunyan V.L. , Harutyunyan T.V. (Republic of Armenia)
Email: [email protected]
1Harutyunyan Vladimir Liparitovich - Corresponding Member of National Academy of Science of Republic of Armenia, Doctor of Economics, Professor;
2Harutyunyan Tigran Vladimirovich - Doctor of Economics, SCIENTIFIC DIRECTION: MACROECONOMIC ISSUES AND FINANCES, INSTITUTE OF ECONOMICS AFTER M. KOTANYAN NATIONAL ACADEMY OF SCIENCE REPUBLIC OF ARMENIA YEREVAN, REPUBLIC OF ARMENIA
Abstract: аs a result of analysis of examinations findings carried for assessment of status of fulfilment of tax liabilities and results received from application of an econometric model developed in the article for the purpose of study of cause-and-effect relationship of the factors affecting the taxes/GDP ratio, it has been established that one of the main reasons for the negative phenomena arising in this directions are the shortcomings existing in tax administration and legislative gaps. For legislative gaps the role of tax system affecting business environment and specifically factors conditioning the efficiency of tax administration shall be substantiated. In terms of efficiency of tax policy, fair allocation of tax burden is of crucial significance. Its relatively low level in the RA does not imply that an efficient tax system is established in the country. In a number of countries tax burden being rather high does not however become a cause of discontent, since it is proportionally allocated and is not fallen on vulnerable groups.
Keywords: tax administration, shadow economy, tax burden, value added tax, profit tax, income tax, excise tax, market shocks.
НАЛОГОВОЕ АДМИНИСТРИРОВАНИЕ И ДЕЛОВАЯ СРЕДА
В РЕСПУБЛИКЕ АРМЕНИЯ 12 Арутюнян В.Л. , Арутюнян Т.В. (Республика Армения)
1Арутюнян Владимир Липаритович - Член-корреспондент Национальной Академии наук Республики Армении, доктор экономических наук, профессор;
2Арутюнян Тигран Владимирович - доктор экономических наук, научное направление: макроэкономические проблемы и финансы, Институт экономики им. М. Котаняна Национальная Академия наук Республики Армении, г. Ереван, Республика Армения
Аннотация: анализом результатов исследований, проведенных для оценки состояния выполнения налоговых обязательств, и полученных результатов с применением эконометрической модели для изучения причинно-следственных связей факторов, влияющих на соотношение налоги/ВВП, было установлено, что одной из основных причин возникновения негативных явлений в этих направлениях являются недостатки налоговой администрации и законодательные пробелы. Для законодательных пробелов должна быть обоснована роль налоговой системы, влияющей на бизнес-среду, а также факторы, обусловливающие эффективность налогового администрирования. С точки зрения эффективности налоговой политики
справедливое распределение налогового бремени имеет решающее значение. Его относительно низкий уровень в РА не означает, что в стране создана эффективная налоговая система. В ряде стран налоговое бремя является довольно высоким, однако не является причиной недовольства, поскольку пропорционально распределяется и не распространяется на уязвимые группы.
Ключевые слова: налоговое администрирование, теневая экономика, налоговая нагрузка, налог на добавленную стоимость, налог на прибыль, подоходный налог, акцизный налог, рыночный шок.
Tax system and business environment are closely interrelated since by the efficiency of this system the success of activities of commercial and non-commercial organizations is conditioned [2]. At the same time, efficient tax system restricts the opportunities for creation of economically unreasonable revenue in various sectors of the national economy. Nevertheless, economically inefficient policy, emergency situations, market shocks and other undesirable developments can have a significant negative impact on tax system [3]. As such for Armenia became the global financial and social crisis, which caused serious problems for the country's tax system and business environment.
Along with the improvement of tax administration, certain reduction of the shadow economy was registered. Since 2010, owing to tax privileges and the crisis overcoming processes, growth trends in tax revenue and GDP had been recorded in the economy [4].
As a result of the analysis conducted in the article the levels of tax revenue and nominal GDP ratio in the RA for 2001-2014 have been assessed (see Table 1).
Table 1. The RA tax revenue and nominal GDP in 2001-2014 (in mln. AMD) [6]
Year Nominal GDP Tax revenue Including Tax burden, %
Profit tax Income tax Excise tax VAT Other
2001 1,175,877 159,420 16,316 11,247 31,016 79,521 21,320 13.56
2002 1,362,472 190,025 17,429 12,487 35,334 95,006 29,769 13.95
2003 1,624,643 218,278 17,627 16,781 39,104 107,769 36,998 13.44
2004 1,907,945 257,520 32,011 20,413 40,657 117,903 46,536 13.5
2005 2,242,881 312,316 46,557 26,616 38,638 146,783 53,723 13.92
2006 2,656,190 375,537 65,329 35,469 39,858 165,912 68,969 14.14
2007 3,149,283 494,421 75,504 46,828 41,547 248,007 82,535 15.7
2008 3,568,228 610,422 86,212 53,749 45,879 318,313 106,270 17.11
2009 3,141,651 518,544 80,801 60,205 42,767 254,158 80,614 16.51
2010 3,460,203 589,901 77,814 73,940 48,141 301,725 88,282 17.05
2011 3,777,945 647,808 97,842 81,211 39,405 328,483 100,867 17.15
2012 4,000,700 741,795 118,653 91,667 49,324 369,662 112,489 18.54
2013 4,272,900 972,939 124,598 256,863 52,098 401,885 137,496 22.77
2014 4,528,873 1,031,234 103,597 289,343 50,560 440,361 147,371 22.77
Based on the information provided, in the article the impact of tax revenue on 2001-2014 tax burden has been analyzed, at the same time direct and indirect tax revenues have been distinguished and their effect on tax burden has been calculated. For this purpose regression equations have been presented, by the coefficients of which the impact of tax revenue and individual types of taxes on tax burden has been calculated.
For the accomplishment of the proposed task, in the article the impact of value added tax, profit tax, income tax and excise tax on the tax revenue/GDP ratio has been assessed by means of regression equations. The distinguishment of these four types of taxes has been conditioned by their share in tax revenue, which has a significant effect on this ratio.
One of the main preconditions for the reduction of the shadow economy in the RA is the increase of efficiency of tax administration, the achievement of which is impossible without amendment and improvement of tax legislation and legal acts regulating relevant legal relations [4]. It is obvious that this process can not be limited to only administrative methods. With this aim in view, in the country shall be established such an economic environment in the conditions of which economic entities will have necessary tax incentives to pay taxes and earn legitimate revenue. For this reason, when developing and implementing tax policy a priority should be given to execution of tax regulatory function.
By the proposed multifactor analysis the impact of various types of taxes on tax burden has been justified. Particularly, for the assessment of interrelation of tax burden (y) and affecting factors, i.e. profit tax (x^, income tax [5] (x2), excise tax (x3), VAT (x4) the application of a known statistical multifactor correlation analysis method is of importance, which is expressed in the form of the following equation:
Y (xj x2, x3, x4) =a0+a1x1+a2x2+a3x3+a4x4=a0+£f=1 aixi (1)
where,
a0 - is a coefficient of impact of other factors effecting the resultant indicator to be determined;
aj a2 a3 a4 - are indicators to be determined each of which characterizes the extent of influence of relevant factor;
a0, a1, a2, a3, a4 - are coefficients of linear regression, the values of which are presented in Table 2 and have been calculated by Eviews programme.
Table 2. Calculation results of multifactor regression coefficients
Dependent Variable: TAXBURD Method: Least Squares Sample: 2001 2014 Included observations: 14
Variable Coefficient Std. Error t-Statistic Prob.
C 0.117268 0.015958 7.348724 0.0000
X1 2.22E-08 1.29E-07 0.171537 0.8676
X2 2.14E-07 2.93E-08 7.323762 0.0000
X3 8.49E-08 4.77E-07 0.178123 0.8626
X4 1.06E-07 4.99E-08 2.118437 0.0632
R-squared 0.983899 Mean dependent var 0.164364
Adjusted R-squared 0.976742 S.D. dependent var 0.031648
S.E. of regression 0.004826 Akaike info criterion -7.556982
Sum squared resid 0.000210 Schwarz criterion -7.328747
Log likelihood 57.89887 F-statistic 137.4892
Durbin-Watson stat 1.338818 Prob(F-statistic) 0.000000
Based on the data used in calculations, the following new multifactor correlation equation of regression has been composed:
Y x1 x2 x3 x4 =0.117+2.219*X1+2.143*X2+8.489*X3+1.057*X4 (2)
By using the equations presented it has been revealed that the impact of other factors on tax burden makes 0.117 points, which, in fact, is not significant. However, during 14 years under review profit tax and income tax, as well as excise tax were of linear nature. As a result the regression coefficients were positive. With respect to VAT it had positive impact and regression coefficient made 1.057 points, which means that 1 point increase of VAT leads to increase of the total indicator, i.e. tax burden by 1.057 points. One point change of profit tax rate results in 2.219 points change of tax burden, and one point change of income tax has statistically substantial and significant impact on tax burden (see Table 2).
Table 3. Assessment of impact of tax types on tax revenue/GDP ratio [1]
Name Tax revenue / GDP Excise tax Income tax Profit tax VAT
Tax revenue/GDP 1 0.84 0.44 0.89 0.92
Excise tax 0.84 1 0.57 0.77 0.82
Income tax 0.44 0.57 1 0.61 0.55
Profit tax 0.89 0.77 0.61 1 0.97
VAT 0.92 0.82 0.55 0.97 1
It is worth mentioning that it is impracticable to fully assess the above described relationships by means of regression equations since strong links are observed between the independent variables (see Table 3).
Based on the direct impact of these taxes on tax revenue/GDP ratio it is not possible to fully estimate it. In this respect, the average elasticity of tax revenue/GDP ratio has been calculated for each type of taxes, the results of which are presented in Table 4.
Table 4. Coefficients of average elasticity of tax revenue/GDP ratio for different types of taxes, % [1]
Indicators Elasticity (t) %
VAT 19.40
Excise tax 27.67
Profit tax 42.97
Income tax 24.72
Average elasticity (t) that shows the average change in tax revenue/GDP ratio in case of change of the relevant tax rate does not fully reflect the is-as state of processes in large and small and medium-sized enterprises. In this regard, in the RA a small and medium-sized enterprise has certain features due to lack of free economic competition and "priority" of monopolies. In such conditions, small and medium-sized enterprises obviously appear in a relatively more vulnerable situation and do not have opportunities for ordinary development. At the same time, in the majority of the countries in the world the significant portion (65-75 percent) of gross domestic product is provided by small and medium-sized enterprises. This allows to shape the middle class of the society, which, in essence, is the primary guarantee of political, economic and social stability. For this purpose, as a result of the studies conducted in the article the ways of development of small and medium-sized enterprises and effective mechanisms of influence of tax administration thereon have been recommended.
In present conditions the factors contributing to the development of the RA economy are tax policy and tax administration and the issue of increase of their efficiency has transformed from an agenda level into a global objective, at the achievement of which are directed joint efforts of the country and specifically state administration institutions, as well as physical and financial resources.
In the countries with the developed economy the solution process of such issues is obviously guided by the logic that clear and generally applicable formats have not been yet
developed for improvement of tax policy and tax administration. Within this context, the development paradigm, the improvement strategy of tax policy and tax administration views the following as the factors of progress: establishment of a favorable business environment and clear tax relations in the given country, elimination of legislative and legal shortcomings aimed at simplification of tax procedures and growth of business activity.
References / Список литературы
1. Эконометрика:учеб. / под ред. Елисеевой И.И. М.: ЮРАЙТ, 2014. С. 48-66.
2. Harutyunyan T.V. Theoretical questions on orientation of tax burden and possibilities of their localization in the Republic of Armenia, Institute of Economics of National Academy of Sciences of the Republic of Armenia, "Current issues on path profile and future outlines", science editor, V.L. Harutyunyan, Yerevan, "Gitutyun" publishing house of NAS RA, 2013. Pages 164-176 (translated from Armenian language^.
3. Harutyunyan T.V., Harutyunyan V.L. Taxes and collection of taxes, "Gitutyun" publishing house of NAS RA, 2010. 600 pages (translated from Armenian language).
4. Harutyunyan T.V. Social and economic causes of the shadow economy in various economy sectors of the RA, Armenia. Finance and economy, № 11-12 (161-162), November-December 2013. Pages 42-44 (translated from Armenian language).
5. From 1 January 2013 the RA Law on Income Tax and the RA Law on Turnover Tax have come into force, also the RA Law on Tax on Income and the RA Law on Compulsory Social Security Payments have been repealed. (translated from Armenian language).
6. Национальная Статистическая Служба РА. [Электронный ресурс]. Режим доступа: http://www.armstat.am/file/article/finansner_2015_1.pdf/ (дата обращения: 29.01.2018).
CHOICE OF SOURCES OF FINANCING Yarmolchik A.V. (Russian Federation) Email: [email protected]
Yarmolchik Alexey Vladimirovich -Master in Economics, DIRECTION: FINANCE AND CREDIT, SAINT-PETERSBURG STATE UNIVERSITY OF ECONOMY, SAINT-PETERSBURG
Abstract: in article the problem of the choice of sources of financing and versions of their decisions are analyzed. The question of relevance of the choice of sources of financing and optimization of the capital plays a large role in development of the company as it is the key moment in management of personal funds. The problem of the choice of a source of financing and determination of optimum structure of the capital is one of the most important which financial managers need to consider and solve. The solution of the matters promote that there is an increase in cost of business, increase in profitability and decrease in financial risks, it allows the company to feel confident in the market, to develop and not to have steadily financial difficulties. Keywords: financing, investment, finance.
