The role of taxes in Russian national security

Dmitry Yu. Fedotov

Abstract


The paper tries to identify the impact of fiscal system on national security. The author evaluates the acting Strategy of National Security of Russia, analyses national fiscal policies, and contrasts different points of view on national fiscal security. The paper also contains a new definition of fiscal security as the capacity of national economy to generate tax revenues sufficient to cover the expenditures related to national security. To assess the role of taxes in national security a correlation study of tax revenues and individual types of budgetary expenditures in 2005-2015 was conducted. It was found that most strategic priorities of state funding correlate with tax revenues. However expenditures on national economy and environmental protection correlate with tax revenues to the lesser extent. Tax revenue elasticity of budgetary expenditures was calculated as well. The results showed a strong dependence of crime level on tax revenues of the state budget. The research period witnessed a growth in budgetary expenditures on law enforcement accompanied by a decline in crime level, and vice versa a cut in funding resulted in higher crime level. National defense is less dependent on tax revenues. Regardless of annual growth in military funding armed forces showed a decline in quantitative indicators.

Highlights

  1. Most strategic directions of Russian budget expenses have close correlation with the amount of tax revenues
  2. The level of law enforcement and public safety in Russia directly depends on the amount of tax revenues to the budget
  3. Russia’s defense capacity depends on the state tax income insignificantly because the dynamics of budget tax revenues does not influence the changes of Russia’s defense capacity indicators substantially

For citation

Fedotov D. Yu. The Role of Taxes in Russian National Security. Journal of Tax Reform, 2017, vol. 3, no. 1, pp. 6–17. DOI : 10.15826/jtr.2017.3.1.027

Article info

Received February 15, 2017; accepted March 20, 2017


Keywords


national security; tax; budget; National Security Strategy; fiscal security; defensive capacity; public order; correlation

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DOI: https://doi.org/10.15826/jtr.2017.3.1.027

Copyright (c) 2017 Dmitry Yu. Fedotov

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