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How progressive are indirect taxes in Russia?

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  • André Decoster

Abstract

The interplay of a differentiated indirect tax structure and the variation in expenditure patterns across households leads to a possibly unequal distribution of indirect tax liabilities across the population. This paper uses the ninth round of the RLMS survey to assess the distributional consequences of the two major components of the Russian indirect tax system: VAT and excise taxes. According to the Kakwani index, the global indirect system can be considered to be progressive overall. Decomposition into constituent terms shows that this is due not only to a progressive VAT structure, but also to progressive excise taxes. This result is partly explained by the progressivity of the excise tax on car fuel, but is also sensitive to peculiarities in the data about alcohol consumption. Copyright (c) The European Bank for Reconstruction and Development, 2005.

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  • André Decoster, 2005. "How progressive are indirect taxes in Russia?," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 13(4), pages 705-729, October.
  • Handle: RePEc:bla:etrans:v:13:y:2005:i:4:p:705-729
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    Cited by:

    1. André Decoster & Jason Loughrey & Cathal O'Donoghue & Dirk Verwerft, 2010. "How regressive are indirect taxes? A microsimulation analysis for five European countries," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 29(2), pages 326-350.
    2. Alf Vanags, 2010. "Tax reform in Latvia: Could it be fair?," SSE Riga/BICEPS Occasional Papers 8, Baltic International Centre for Economic Policy Studies (BICEPS);Stockholm School of Economics in Riga (SSE Riga).
    3. Christian E. Weller & Manita Rao, 2008. "Can Progressive Taxation Contribute to Economic Development?," Working Papers wp176, Political Economy Research Institute, University of Massachusetts at Amherst.
    4. Daria Popova, 2013. "Impact assessment of alternative reforms of Child Allowances using RUSMOD – the static tax-benefit microsimulation model for Russia," International Journal of Microsimulation, International Microsimulation Association, vol. 1(6), pages 122-156.

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