Projected shortfall in personal income tax revenues of regional governments in Russia due to the COVID-19 pandemic

Maria O. Kakaulina


The COVID-19 pandemic has put a great strain on the Russian economy and budget revenue. The study aims at furnishing an estimate of losses in personal income tax revenue in regional government budgets in 2020–2023 due to the COVID-19 pandemic. In order to investigate the shortfall in tax revenues, three factors were studied: the amount of damage caused by the COVID-19 outbreak to the whole economic system; the sensitivity of the state revenue base to the crisis; the sensitivity of regional tax revenue to the revenue base. The study was based on the annual reports of the Federal Tax Service of Russia, Rosstat data, Forecast of the Social and Economic Development of the Russian Federation, and data from the “National action plan to ensure the recovery of employment and incomes of population, economic growth and long-term structural changes in the economy”. It was found that recession will lead to a significant reduction in people’s income over the given period. As a result, personal income tax revenues will decrease. The budget losses will reach 416.6 billion rubles by the end of the 2020 fiscal year. This is equivalent to 0.4% of GDP and 9.7% of total income from personal income tax in an economic situation unmarred by the pandemic. The largest fall in public revenue is expected in the regions which stand out in regard to personal income tax revenues per capita. The research results confirm the initial hypothesis that the negative impact of the pandemic on personal income tax revenues depends on the share of income tax revenues of a particular region or municipality. The findings can be used by the regional and municipal financial authorities for developing draft budgets for 2022 and the planning period of 2023–2024.

For citation

Kakaulina M.O. Projected shortfall in personal income tax revenues of regional governments in Russia due to the COVID-19 pandemic. Journal of Tax Reform. 2021;7(1):39–54. DOI: 10.15826/jtr.2021.7.1.089

Article info

Received February 12, 2021; Revised March 3, 2021; Accepted April 10, 2021


personal income tax, budget losses, consolidated regional budget, forecast, COVID-19 pandemic


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