Evaluating scenarios of a personal income tax reform in Russia

Evgeny V. Balatsky, Natalia A. Ekimova


This article is aimed at evaluating different scenarios of the personal income tax reform in Russia, intended to replace the flat tax scale with a progressive scale. To test the expediency of this plan, the authors present a three-parameter model to calculate the expected effects from different scenarios. The model is based on the idea that the best project should simultaneously reduce the assets ratio, increase budgetary revenue and should minimize the risk of the reform’s non-fulfillment. The research relies on the statistical data on the population’s income distribution. To neutralize distortions, the authors calibrated the initial statistical data on distribution in the high-income group (tenth decile) of the population. The risk of non-fulfillment was assessed through an expert poll. The proposed model was used to test four reform projects, which were developed by the government, the Communist Party, the Liberal Democratic Party, and the party “Just Russia”. It was found that the best project, according to the three parameters applied in the analysis, was the governmental project, which preserves the flat income scale and raises the rate from 13 to 15%. It was also shown that the other projects dramatically overestimated the growth in tax revenues due to incorrect calculations of the distribution of the population’s incomes in the tenth decile group. Thus, at the moment there are no rational alternatives to the governmental project of the reform and there is also no consensus between the Russian opposition parties and the expert community, which prevents them from working together to design a single reform project. It is concluded that at present Russia needs a balanced project which would include multi-step adjustments of the personal income tax over an extended period of time – ten years or more.

For citation

Balatsky E. V., Ekimova N. A. Evaluating scenarios of a personal income tax reform in Russia. Journal of Tax Reform. 2019;5(1):6–22. DOI: 10.15826/jtr.2019.5.1.057

 Article info

Received January 21, 2019; accepted March 18, 2019


progressive personal income tax; flat personal income tax; tax reform, social inequality; budgetary income


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DOI: http://dx.doi.org/10.15826/jtr.2019.5.1.057

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