Financial Journal Vol.14 No.1 2022
Vladimir V. Gromov
Features and Problems of Tax Incentives for Small Software Companies in Russia, p. 8-25
Since 2021, Russian IT companies have been stimulated by enhanced tax incentives, which allow one to pay corporate income tax only to the federal budget as well as pay social security contributions at a heavily reduced rate. While medium and large businesses get benefits from the new government support, small enterprises are traditionally supported through the simplified taxation system, which offers alternative tax measures. For this reason, the purpose of the article is to identify problems which could arise when new incentives are distributed in the economy. Based on the structure of the IT industry and the conditions of reducing taxes, it is argued that fairness of taxation is broken as small IT (software) companies constitute the majority and, at the same time, have little chance to be included in the tax incentive scope. The new privileges addressed to IT companies actually favor some businesses with high turnovers, and even the favorable simplified taxation system cannot completely eliminate distortions in the tax burden level. Along with this, sub-central governments have a strong motivation to raise their tax revenues within the framework of vertical tax competition. There is a need to make the tax system more neutral as well to harmonize tax regimes, and the article provides relevant proposals.
Keywords: corporate income tax, IT industry, simplified taxation system, small business, social security contributions, software company, tax incentive
JEL: E62, H32, K34
For citation: Gromov V.V. Features and Problems of Tax Incentives for Small Software Companies in Russia. Financial Journal, 2022, vol. 14, no. 1, pp. 8–25 (In Russ.). https://doi.org/10.31107/2075-1990-2022-1-8-25.
© Gromov V.V., 2022
Oleg M. Skapenker
Institutional Structure of the Russian Financial Market: The Need for Regulatory Transformation, p. 26-38
The article analyzes the current state of the Russian financial market’s institutional structure. The main variants of activity combinations of its participants allowed by the law are described. Based on a comparison of the advantages and risks arising from the combination of different areas of work by market participants, proposals are formed to adjust the regulatory requirements for permissible combinations of activities. The purpose of the changes put forward is to increase the efficiency of financial resource redistribution, which, in turn, will provide financing for economic growth of the Russian Federation. It is proposed to consolidate the division of activities of financial market participants into two categories. The first one is systemically important; such organizations should be controlled by the state directly or through a chain of owners. The other one is the rest of the organizations, for which the opportunities for simultaneous work in a large number of areas can be expanded under such conditions. When fully state-controlled companies perform the functions of an exchange, a central depository, a clearing organization and a central counterparty, it seems that the rest of the market participants, without creating significant risks for the market, will be able to combine work in the securities market using their own and clients’ funds, operation as a credit and deposit intermediary or an investment and financial platform, and work in the foreign exchange market and the digital asset market. Improving the efficiency of the financial market may be instrumental in providing the projects and production with the financial resources.
Keywords: institutional structure, banks, stock market, stock exchange, market specialization, combination of activities, financial market regulation
JEL: G18, G28, K22
For citation: Skapenker O.M. Institutional Structure of the Russian Financial Market: The Need for Regulatory Transformation. Financial Journal, 2022, vol. 14, no. 1, pp. 26–38 (In Russ.). https://doi.org/10.31107/2075-1990-2022-1-26-38.
© Skapenker O.M., 2022
Lea Melnikovová, Shukhrat Shadmanov, Sergey Voronin, Bobur Qoraboev
Uzbekistan’s Trade Policy Liberalization. Predicted Impact of WTO Accession on Chemical Industry Trade, p. 39-55
This paper is dedicated to the recent reforms in Uzbekistan’s foreign trade policy and the process of the country’s accession to the World Trade Organization. It pays special attention to the chemical industry trade; with the partial equilibrium model employed, expected changes in imports of chemicals, budget revenues and consumer welfare are revealed. Two scenarios — mere tariff reduction or abolition of country-specific discrimination practices in imports — are considered. Results show that, in the former case, imports of chemical products and consumer welfare will slightly increase and budget revenues will decline; the outcome in the latter case differs: budget revenues will grow considerably, whereas imports and consumer welfare will decrease. We conclude in the latter case that the negative effect will be outweighed by creating a fairer, more competitive environment thanks to removing discrimination practices such as import-specific excise taxes and exemptions on import duty payments for state companies.
Keywords: World Trade Organization, free trade agreements, Harmonized System classification, most favoured nation, chemicals and allied industries, partial equilibrium model, tariff revenues, consumer welfare
JEL: E21, F13, F14, F15, F17
For citation: Melnikovová L., Shadmanov Sh., Voronin S., Qoraboev B. Uzbekistan’s Trade Policy Liberalization. Predicted Impact of WTO Accession on Chemical Industry Trade. Financial Journal, 2022, vol. 14, no. 1, pp. 39–55. https://doi.org/10.31107/2075-1990-2022-1-39-55.
© Melnikovová L., Shadmanov Sh., Voronin S., Qoraboev B., 2022
Vladislav N. Rutskiy, Ilia A. Filippov
Relationship Between the Level of Poverty and the Factors of Green Economy in the Countries of the European Union, p. 56-70
The paper is aimed at studying approaches to measuring poverty and the green economy, and conducting an empirical analysis of the relationship between the poverty rate and the factors of the green economy for the countries of the European Union. The authors identify trends in the formation of a new model of environmentally sustainable development in these countries. An empirical correlation and regression model is developed, which describes, along with macroeconomic factors, the impact of green economy factors on the level of poverty risk in the EU countries. The assessment of the model specification based on panel data of the countries of the European Union shows a negative relationship between the share of renewable energy and labor productivity on the one hand and the level of poverty risk on the other hand. This indicates the need for further development of green economy in the EU countries countries.
Keywords: green economy, sustainable development, poverty, inequality, natural capital, human capital, green financing
JEL: O44, Q56, C33
For citation: Rutskiy V.N., Filippov I.A. Relationship Between the Level of Poverty and the Factors of Green Economy in the Countries of the European Union. Financial Journal, 2022, vol. 14, no. 1, pp. 56–70 (In Russ.). https://doi.org/10.31107/2075-1990-2022-1-56-70.
© Rutskiy V.N., Filippov I.A., 2022
Anthony Orji, Christian E. Ugwu, Jonathan E. Ogbuabor, Onyinye I. Anthony-Orji, Lynda C. Nwufo
Cash Reserve Ratio and Credit to Micro-, Small and Medium-Sized Enterprises
in Developing Economies. Analysis of Transmission Channels Using Nigerian Data, p. 71-88
This study examines the channels of transmission through which cash reserve ratio impacts on credit to micro-, small and medium-sized enterprises (MSMEs). A vector error correction model was used to capture the objective. Quarterly data ranging from 2001 to 2017 were also utilized in the analysis. The study found that cash reserve ratio indirectly impacts credit to MSMEs through liquidity ratio and lending interest rate as its channels of transmission. It is worthy to note that, as liquidity ratio has a positive significant impact on credit to MSMEs, lending interest rate has a negative but significant impact on credit to MSMEs. To boost economic productivity in developing economies, the study therefore recommends that the monetary authorities reduce the cash reserve ratio in order to increase commercial banks’ liquidity. As the commercial banks’ liquidity rises, they should also reduce their lending interest rate to increase access to credit by MSMEs. Again, the government should appropriate and monitor the judicious disbursement of interest-free loans/credit to MSMEs through banks, especially development banks.
Keywords: cash reserve ratio; credit; channels of transmission; micro-, small and medium-sized enterprises
JEL: E51, G21, L26
For citation: Orji A., Ogbuabor J.E., Ugwu C.E., Anthony-Orji O.I., Nwufo L.C. Cash Reserve Ratio and Credit to Micro-, Small and Medium-Sized Enterprises in Developing Economies. Analysis of Transmission Channels Using Nigerian Data. Financial Journal, 2022, vol. 14, no. 1, pp. 71–88. https://doi.org/10.31107/2075-1990-2022-1-71-88.
© Orji A., Ogbuabor J.E., Ugwu C.E., Anthony-Orji O.I., Nwufo L.C., 2022
Varvara V. Nazarova, Anastasia A. Ivanova
Payment to Investors Policy Choice: US Market Research, p. 89-107
In recent years, US share buyback costs have hit record highs, in part due to the 2017 Tax Reform, shareholder activities and record low borrowing costs. The purpose of the present study is to explore the reasons for choosing a policy of payments to investors in American companies and the impact of share buybacks on the results of companies and the economic system. The study reviews traditional theories that explain the choice of investor payout policy. The authors have highlighted the main motives of companies when making decisions on the payment mechanism. After examining the existing theoretical aspects of the choice of payment policy and the trend of US buybacks, a panel data regression analysis of is carried out to comprehensively investigate the causes and consequences of the choice of payment policy. The study identifies managements’ motives for the share buyback and demonstrates the positive impact of share buybacks on the company’s development.
Keywords: dividend payment policy, buyback, capital requirements, reinvestment, economic growth, share buyback programs
For citation: Nazarova V.V., Ivanova A.A. Payment to Investors Policy Choice: US Market Research. Financial Journal, 2022, vol. 14, no. 1, pp. 89–107 (In Russ.). https://doi.org/10.31107/2075-1990-2022-1-89-107.
© Nazarova V.V., Ivanova A.A., 2022
Aleksei A. Batarin
Features of State Regulation of Cash Register Use in the Kyrgyz Republic, p. 108-125
The use of cash registers and its consolidation in the law are the norm for any civilized country in the world. This is due to the need for the state to protect its fiscal interests. The most common tool for controlling the revenue of entrepreneurs selling their goods and services to the public is the use of a cash register. Since the use of cash registers serves precisely the purposes of accounting for the taxable base, the control of the use of cash registers is carried out by the tax service. Consequently, provisions on the use of cash registers, as a rule, are included in tax legislation. However, this does not always happen. The experience of the Kyrgyz Republic in legislative registration of the use of cash registers is, on the one hand, textbook, but on the other hand—unique. The problems of current regulation in this area are related to the uncertainty of the legislative definition of the “use of cash registers” category in the system of relations regulated by the Tax Code of the Kyrgyz Republic. The same applies to the uncertainty in the classification of sanctions norms contained in the Code of the Kyrgyz Republic on offenses. In this regard, the author of this article gives specific recommendations to eliminate existing problems in the field of legislative regulation, including unambiguous identification of the place of the obligation to use cash registers and monitor compliance with such a duty in the system of legislation on taxes and fees, as well as proposals for further improvement of the current legal framework.
Keywords: cash registers, fixing calculations, Tax Code, responsibility
JEL: К34, К42
For citation: Batarin A.A. Features of State Regulation of Cash Register Use in the Kyrgyz Republic. Financial Journal, 2022, vol. 14, no. 1, pp. 108–125 (In Russ.). https://doi.org/10.31107/2075-1990-2022-1-108-125.
© Batarin A.A., 2022
Tatiana A. Gorbacheva
Stablecoins As a New Word in the Cryptocurrency Market, p. 126-139
In the past few years, along with the crypto assets market, a new term has appeared: stablecoins. Unlike cryptocurrencies, however, not so much research has been devoted to this topic. The emergence of global stablecoin projects, a significant increase in the volume of investment initiatives, and growth in the number of transactions have forced central banks to seriously pay attention to these in order to ensure financial stability as one of their functions. This topic is undoubtedly relevant due to the novelty of the concept which has appeared. The purpose of this article is to study the economic essence of stablecoins, their types, and the current state of this market. The methods of comparative analysis as well as critical and systematic approach to the study of information are used in the work. Existing ways to define the concept of stablecoins are investigated. The classifications of stablecoins and the main types of the most reliable coins on the market are examined. The current state of the stablecoin market is analyzed. As a result of the study, a number of conclusions have been made. Despite the lack of a legally fixed and generally accepted definition of stablecoins, in general, stablecoins are tokens secured by different types of assets. The economic essence of stablecoins is revealed through the goals of their creation, types of security and stabilization mechanisms, as well as the nature of the relationship between the issuer and the owner of the stablecoin. Over the past three years, the stablecoin market has grown almost fivefold. Such growth means significant penetration into the payment system, and then into the global financial system, which requires the development of international regulatory standards to minimize possible risks and preserve financial stability. The prospects for the development of stablecoins are associated with the creation and promotion of digital currencies of central banks (central securities) and cross-border payments in one or more central securities.
Keywords: stablecoin, stable coin, digital currencies, cryptocurrency, crypto asset, digital currencies of central banks, token, fiat currencies, collateral
JEL: E42, Е52, F31
For citation: Gorbacheva T.A.. Stablecoins As a New Word in the Cryptocurrency Market. Financial Journal, 2022, vol. 14, no. 1, pp. 126–139 (In Russ.). https://doi.org/10.31107/2075-1990-2022-1-126-139.
© Gorbacheva T.A., 2022