Strategic tax collection and fiscal decentralization: the case of Russia

Alexander Libman () and Lars Feld
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Alexander Libman: University of Mannheim

No 2009/11, Working Papers from Institut d'Economia de Barcelona (IEB)

Abstract: In a centralized federation, where tax rates and taxation rules are set by the federal government, manipulating the thoroughness of tax auditing and the effectiveness of tax collection could be attractive for regional authorities because of a variety of reasons. These range from tax competition to principal-agent problems, state capture and benefits of fiscal equalization. In this paper we discuss strategic tax auditing and collection from the perspective of fiscal federalism and test for strategic tax collection empirically using data of the Russian Federation. Russia’s regional authorities in the 1990s have always been suspect of tax auditing manipulations in their favor. However, in the 2000s increasing bargaining po¬wer of the centre seems to induce tax collection bodies in the regions to manipulate tax auditing in favor of the federal centre. Our findings confirm the existence of strategic tax collection for the Yeltsin period after exclusion of outliers; the results for the Putin period are however rather ambiguous.

Keywords: fiscal federalism; tax arrears; transition economies (search for similar items in EconPapers)
JEL-codes: H26 H77 (search for similar items in EconPapers)
Pages: 66 pages
Date: 2009
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Strategic Tax Collection and Fiscal Decentralization: The Case of Russia (2013)
Journal Article: Strategic Tax Collection and Fiscal Decentralization: The Case of Russia (2013)
Working Paper: Strategic Tax Collection and Fiscal Decentralisation: The Case of Russia (2007)
Working Paper: Strategic Tax Collection and Fiscal Decentralisation: The Case of Russia (2007)
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