VAT and its influence on Russian macroindicators

About the author:

Lyudmila P. Koroleva, Cand. Sci. (Econ.), Associate Professor, Department of Theoretical Economics and Economic Security, National Research Mordovia State University; korol.l@mail.ru, ORCID: 0000-0002-8375-8524

Abstract:

The importance of this research links to the controversial discussion about the role of the value-added tax (VAT) in the sphere of macroeconomic regulation. The assumption of its neutral influence on economic growth has led to increasing VAT rate in Russia from 18% to 20%. However, the reduction of consumer expenditures, revenues, and profits is a possible negative effect. In addition, people criticize the mechanism of VAT refund for the absence of any impact on export and investment. Thus, the goal of this research lies in verifying the most popular visions on VAT’s influence on Russian macroindicators.

The methodology of the research comes from the concepts recognizing taxes as an effective tool. The author applies general scientific and econometric methods (correlation, analysis of variance, and regression analysis) using MS Excel.

The author formulates four hypotheses that have shown stable views about VAT’s influence on macroeconomy. They have been tested via six equations of linear regression; the significance of the equations has been estimated via the coefficient of determination, Fisher criterion, the average error of approximation; the significance of the coefficients d — via p-value and Student’s t-criterion. Each equation is statistically significant reliably reflecting the relationship between the resulting and factor.

The obtained results have proven the 2^nd and 4^th hypotheses. Conclusion: VAT is directly related to consumer spending, gross profit and gross mixed income, intermediate consumption, and export. VAT refund stimulates export and investments to capital assets. The results of research could be considered as an arguments of proposals to changing the procedure for calculating and paying VAT in Russia.

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