The Russian budget suffered from the limited business activity
During the several years, tax revenues for the budget had been consistently increasing. However, the volume of taxes collected in 2020 could be less that planned: for the first time since 2009, the dynamics of budget revenues is negative.
The volume of tax revenues for 2020 is lower than in 2018
According to the Information agency Credinform, the state consolidated federal budget received 13,2 trillion RUB in January-August 2020, 12% lower than in corresponding period of 2019 when 15 trillion RUB were received, and 3% lower than in 2018 with 13,6 trillion RUB received (Picture 1).
Negative dynamics for the first time in 10 years
Examining the monthly dynamics of tax revenues, the trend to increase in January-March 2020 (Picture 2) is observed. Since April 2020, the volume of received tax revenues decreased, and the current dynamics is negative for the first time in 10 years.
Hope for growth
From January to August 2020, there is a 18% decrease (0,6 trillion RUB) in income tax revenues from the companies and 38% decrease (1,6 trillion RUB) in mineral extraction tax revenues compared to the same period of 2019 (Picture 3).
While there is the reduction in income tax and mineral extraction tax revenues, the collection of other taxes is increased. In particular, the volume of value added tax (VAT) payments and personal income tax in January-August 2020 increased by 4% (0,1 trillion RUB) compared to 2019.
A simultaneous increase in VAT and personal income tax payments may indicate a reduction in shadow business in Russia. The growth in VAT revenues was influenced, among other things, by the 20% increased rate. However, the upward trend in revenues has been observed even before its increase in 2019.
Already, it can be concluded that as a result of the business activity restrictions and reduction in tax revenues, the budget of the Russian Federation in 2020 will not receive about 5,5 trillion rubles. A 38% cut in the mineral extraction tax may have a negative impact on the formation of Russia's GDP, since the share of the oil and gas sector is significant.
Simulating situation without the negative impact of external events, the consolidated budget of the Russian Federation for January-August 2020 could show a dynamics of 15% compared to 2019.