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The Ministry of Taxation of the Russian Federation has reported the taxes and fees collected for the period January-June 2003.
The Ministry of Taxation of the Russian Federation has reported the taxes and fees collected for the period January-June 2003. The data show that the 13% flat tax on personal income continues to achieve very positive results.
During January-June 2003, the Ministry of Taxation collected 197.6 billion rubles in personal income tax receipts, an increase of 31.6% over the comparable period in 2002. Inflation during the first half of 2003 was 7.9%. Assuming annual inflation of about 15% for all of 2003, personal income tax revenue rose at an annualized real rate of 16.6% in the first half of 2003 as against the same period in 2002. This growth builds on real revenue increases of 28% in 2001 and 20.7% in 2002.
The 32.6% nominal growth in personal income tax receipts continues to outpace the overall rise in taxes and fees collected by the Ministry of Finance, which grew by a less robust 17.5% for January-June 2003 compared with the same period in 2002. In percentage terms, personal income tax receipts grew more rapidly than both corporate profit tax and VAT. The 13% flat tax on personal income has steadily grown in importance as source of revenue during the past two-and-a-half years.
Alvin Rabushka is the David and Joan Traitel Senior Fellow at the Hoover Institution. He is an expert on taxation. His books and articles on the flat tax, with Hoover fellow Robert Hall, have provided the foundation for numerous tax reform bills. His book Taxation in Colonial America was just released by Princeton University Press. His other research areas are economic development in Pacific Rim countries, Israel, and the transition economies of Central and Eastern Europe, notably Russia.