Journal of Tax Reform
The role of consolidated groups of taxpayers in providing innovative breakthrough: to be or not to be
Ludmila P. Korolyova
Ogarev Mordovia State University, Saransk, Russia
Abstract
Tax consolidation was introduced in Russia in 2012. The number of corporations, which are responsible members of consolidated groups of taxpayers, expands annually. The number of participating organizations, grouped around them, increases permanently. There is an indication of growing interest of tthe largest vertically-integrated holdings of mining (oil and gas) and metals industry in this profits taxation scheme. However, regional authorities cannot accept the loss of tax revenues due to the new procedure of its distribution. The article deals with the conflict of interests of business and government. The article explores the role of the consolidated group of taxpayers in the mechanism of alignment of economic differentiation of the regions and promotion of investment and innovative activities of the largest vertically integrated oil and gas structures and metallurgical industry in Russia. The aim of the article is to substantiate the necessity of shifting the accent in improving the tax consolidated group members to solving the problem of the regional budgets’ return loss from the repartition of the income tax entry for changing the general concept of taxation, assuming the expansion of tax funds to promote investment and innovative activities of the largest taxpayers, which are the vertically and horizontally integrated business structures. The author’s position is argued by comparing the advantages and disadvantages of introducing the institute of consolidation, the results of analysis of dynamics of the consolidated groups of taxpayers quantity, the changes of the tax incomes from the Russian Federation subjects as a result of the payment income tax; also the author bring up a comparison of the tax funds in the Volga Federal District budgets. The article offers to preserve the institute of consolidated taxpayer without significant changes and restrictions, without worsening the group members’ positions and to concentrate legislator and taxmen forces to wide it’s stimulating role. Innovative breakthrough is the key aim of the long-term Russian Federation development which can only be provided by forces of the largest vertically and horizontally integrated structures, possessing large capitals, which is necessary for large-scale projects implementation.
Keywords
Consolidated groups of taxpayers; income tax; organization; region; differentiation; promotion; innovative activity.
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About Authors
Koroleva, Ludmila P. — PhD in Economics, Associate Professor, Chair of Finances andCredit, Ogarev Mordovia State University (44a Polezhaeva St., 430005, Saransk, Russian Federation); e-mail: korol.l@mail.ru.
DOI: http://dx.doi.org/10.15826/jtr.2015.1.2.011
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