Tax support for Russian air carriers amid contemporary economic challenges

About the authors:

Anna V. Kulinka, Senior Consultant, Department of Taxes, Law and Business Support, B1-Consult LLC, Saint Petersburg; kulinka.av@yandex.ru, https://orcid.org/0009-0003-1550-9272

Natalia V. Pokrovskaya, Cand. Sci. (Econ.), Associate Professor, Associate Professor Department of Credit Theory and Financial Management, St. Petersburg State University; n.pokrovskaia@spbu.ru, ORCID: 0000-0002-8314-9470

Abstract:

The article analyzes the consequences of tax support measures for air carriers, assessing the appropriateness and proportionality of tax burden reduction measures in the industry. The purpose of the study is to characterize the role of tax support for Russian airlines, evaluate the effectiveness, adequacy, and justification of the implemented measures in mitigating the effects of economic downturns since 2020. To achieve this goal, the study examines the magnitude and structure of the tax burden on medium and large-scale air carries, tracing its dynamics during pre-pandemic period, the COVID-19 pandemic, and the sanctions pressure in 2022. The results of the study confirm the hypotheses that value-added tax (VAT) is the key tax for air carriers. While the support measures introduced in 2020 and 2022 reduced the tax burden on airlines, additional measures may be required to completely overcome the negative consequences caused by geopolitical events.

References:

Baburina, N., Murav’ev, D., & Zaharova, K. (2024). Systemic approach to the classification of state financial support measures for small and medium-sized businesses in the Russian Federation. Ars Administrandi, 16(3), 368–392. https://doi.org/10.17072/2218-9173-2024-3-368-392 [In Russian]

Belov, A.V. (2021). Japan’s economic policy during the pandemic. World Economy and International Relations, 65(1), 33–41. https://dx.doi.org/10.20542/0131-2227-2021-65-1-33-41 [In Russian]

Belozerov, S. A. & Sokolovskaya, E. (2020). Economic sanctions against Russia and an assessment of the policy to overcome their impact. Economy of regions, 16(4), 1115–1131. https://doi.org/10.17059/ekon.reg.2020-4-8 [In Russian]

Bubnov, V. A. (2022). The impact of unfriendly countries’ sanctions policy on the Russian financial system. Bulletin of Baikal State University, 32(2), 283–289. https://doi.org/
10.17150/2500-2759.2022.32(2).283-289 [In Russian]

Bukina, I. S. (2022). The impact of sanctions and prospects for budgetary and tax policy in Russia. Federalism, 27(3), 109–124. https://doi.org/10.21686/2073-1051-2022-3-109-124 [In Russian]

Viktorova, N. G. & Evstigneev, E. N. (2024). Prospects for improving the toolkit of the tax ecosystem in the context of systemic and technological transformations. Tyumen State University Herald. Social, Economic, and Law Research, 10(2), 98–114. https://doi.org/10.21684/2411-7897-2024-10-2-98-114 [In Russian]

Vylkova, E. S. (2020). Tax policy instruments to combat the consequences of emergencies. Economics, taxes & law, 13(3), 136–143. [In Russian]

Vylkova, E. S. & Kiseleva, E. A. (2016). Leveling the imbalance of interests of participants in tax administration at the level of a commercial organization. KultInformPress. [In Russian]

Vylkova, E. S. & Pokrovskaia, N. V. (2021). Theoretical approaches to the interpretation of tax burden, tax pressure, and the severity of taxation. Izvestiia SPbGEU, 4, 45–51. https://doi.org/10.18721/JE.14504 [In Russian]

Zhigalov, V. M. (2023). Assessment of strategic stability in the context of economic sanctions. The Humanities and Social Sciences, 5(132), 62–65. [In Russian]

Pinskaya, M. R., Steshenko, Yu. A. & Tsagan-Mandzhieva, K. N. (2021). Tax support during the coronacrisis: Whom to help? Voprosy ekonomiki, 5, 129–144. https://doi.org/10.32609/0042-8736-2021-5-129-144 [In Russian]

Pinskaya, M. R., Shatalov, S. D., Steshenko, Yu. A. & Balakin, R. V. (2024). New challenges affecting Russia’s tax security. Bulletin of Baikal State University, 34(1), 12–26. https://doi.org/10.17150/2500-2759.2024.34(1).12-26 [In Russian]

Pogorleckij, A. I., Pokrovskaia, N. V. (2021). Comparative analysis of fiscal regulation measures of G20 countries in the era of the coronacrisis and in the post-coronavirus perspective. Journal of Applied Economic Research, 20(1), 31–61. https://doi.org/10.15826/vestnik.2021.20.1.002 [In Russian]

Rozanova, T. P., Tyurina, Yu. G. & Shvec, I. Yu. (2024). State regulation and support measures for the hospitality and tourism industry. RISK: Resources, Information, Supply, Competition, 4, 110–116. [In Russian]

Troyanskaya M. A. & Bychkova S. Yu. (2024). Sanctions policy against Russia’s fuel and energy complex. Ekonomika i predprinimatel’stvo, 6, 104–107. [In Russian]

Frenkel’, A. A., Tihomirov, B. I. & Surkov. A. A. (2023). Ups and downs of business activity on the waves of crises, the coronavirus pandemic, and unprecedented Western sanctions. Finance: Theory and Practice, 27(1), 6–17. [In Russian]

Yakunina, A. V., Ermakova, E. A., Yakunin, S. V. & Semernina, Yu. V. (2022). Financial assessment of the vulnerability of sectors of the Russian economy. Science review: Theory and Practice, 12(3), 404–415. https://doi.org/10.35679/2226-0226-2022-12-3-404-415 [In Russian]

Athira, A. & Ramesh, V. K. (2023). COVID-19 and corporate tax avoidance: International evidence. International Business Review, 32(4), 102143. https://doi.org/10.1016/j.ibusrev.2023.102143

Bogachov, S. Vishnevsky, V. P., Gurnak, A. V. & Nekliudova V. D. (2024). Modern tax trends and economic growth in a turbulent world: Insights from developed and developing economies. Journal of Tax Reform, 10(1), 63–83. https://doi.org/10.15826/jtr.2024.10.1.157

Fedotov, D. Yu. & Burov, V. Yu. (2024). Taxes and customs duties as instruments for extracting oil rent into the state budget: The case of Russia. Journal of Tax Reform, 10(1), 19–37. https://doi.org/10.15826/jtr.2024.10.1.154

Ochen, R. & Lakuma, P. C. (2024). COVID-19: How tax policy responses affected Uganda’s economy. Tanzanian Economic Review, 13(2). https://doi.org/10.56279/ter.v13i2.111

Zakharova, K. A., Muravyev, D. A., Ponkratov, V. V. & Degtyaryova, E. V. (2024). Optimal tax trajectory of a commercial organization: Economic and mathematical approach. Mathematics, 12(22), 3611. https://doi.org/10.3390/math12223611