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Financial Journal Vol.14 No.3 2022

CONTENTS

V.V. Gromov
Favorable Tax Treatment of Russian Software Companies and its Evolution from the Choice of Preferences to the Tax Maneuver in IT industry, p. 8-27
Abstract 
IT industry is noticeably distinguished by the tax support provided to it in the Russian economy. Nowadays software companies are treated as main contributors to national technological breakthrough being one of the main priorities of federal tax policy. Tax maneuver of 2021 significantly changed well-known tax rules, but some of novelties became a logical development of previously implemented measures. We systematize them by following our classification that introduces three main phases, all of which provided a qualitative update of the previous taxation framework, and for analysis consider particular reliefs as a unified, specific tax regime integrated in the general taxation system. The purpose of the article is to identify priorities and evaluate effectiveness of mechanisms designed to stimulate IT companies, including a preliminary assessment of valid perimeter and performance of the maneuver. Obtained results indicate that the tax regime initially given to software business had a bad design, an extremely narrow scope of beneficiaries and, due to this, a little effect on the IT industry; modernization of that design with the revision of basics was necessary at least in order to stop the decline of IT industry in the part of small companies. However, the main trend of recent tax policy demonstrates a strengthening of sustainable business with comparative fall of competitiveness of beginning entrepreneurs. In sum, the tax maneuver has a positive economic impact but covers, according to our estimates, less than 20% of IT companies. 
Keywords: IT company, IT industry, corporate income tax, tax relief, tax regime, tax incentive, software business 
JEL: E62, H32, K34 
For citation: Gromov V.V. (2022). Favorable Tax Treatment of Russian Software Companies and its Evolution from the Choice of Preferences to the Tax Maneuver in IT industry. Financial Journal, vol. 14, no. 3, pp. 9–27 (In Russ.). https://doi.org/10.31107/2075-1990-2022-3-9-27. 
© Gromov V.V., 2022

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E.N. Timchenko, A.I. Pogorletsky
Property Taxation: Transformational Changes in the Digital Era and Impact of the COVID-19 Pandemic, p. 28-43
Abstract 
The timeliness of this research is determined by the large-scale changes taking place in the world economy under the influence of digitalization, which accelerated during the COVID-19 pandemic. These processes affect the direction of transformational changes in property taxation. The object of the study is property taxation in the context of the proliferation of various forms of digital assets, which are virtual property. The purpose of the article is to find correlations between digitalization, the need to limit overconsumption, which has increased during the pandemic of a new coronavirus infection, and the prospects for changes in property taxation. The possibilities of state tax regulation and interstate cooperation in the context of property taxation are considered. The prospects for expanding the effect of property taxation to the virtual spaces of the metauniverse are highlighted. The article uses general scientific research methods such as analysis, synthesis, generalization and analogy, and contains historical and cross-country comparison. The information base is formed on the basis of data from international organizations, consulting, analytical and research companies, as well as government agencies. As a result of the research, the hypothesis was confirmed that the current changes in the global economy require transformation of approaches to property taxation both at the state and international levels, taking into account the expansion of modern technology capabilities and the need to limit excessive consumption. Recommendations have been formulated to expand the scope of property taxation in virtual spaces and to increase the level of the wealth taxation of the wealthiest segments of the population possessing virtual forms of ownership.
Keywords: taxes, property taxation, virtual assets, COVID-19 pandemic, digitalization
JEL: H24, H25, H30, L86
For citation: Timchenko E.N., Pogorletsky A.I. (2022). Property Taxation: Transformational Changes in the Digital Era and Impact of the COVID-19 Pandemic. Financial Journal, vol. 14, no. 3, pp. 28–43 (In Russ.). https://doi.org/10.31107/2075-1990-2022-3-28-43.
© Timchenko E.N., Pogorletsky A.I., 2022

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M.G. Girich, K.V. Ivanovicheva, A.D. Levashenko
Taxation and Social Insurance for Employees of Online Platforms: Comparison of Russian and International Experience, p. 44-60
Abstract 
The issue of online platforms’ employment is topical due to the emergence of questions of application of labor law, taxation and social insurance to such persons providing services via platforms. The purpose of this article is to develop recommendations regarding the regulation of relations arising between the platform and its employee in Russia, including the application of labor and business legislation, taxation and social insurance of such persons, taking into account the comparison of the legal regulation in Russia and in foreign countries. The methodology of the work is based on a comparative legal analysis of legal documents in foreign countries (Spain, Great Britain, Italy, France) and Russia. One of the international trends in the regulation of employment on online platforms is the application of labor laws to regulate the relationship between the employee and the platform, or the introduction of a special status of a “quasi-employee” with the provision of platforms with certain obligations to ensure the employment rights of employees. In Russia, the legal status of platform employees is not defined, it is not defined, e.g. whether a person is an employee, an entrepreneur, or a legal entity. For tax purposes, platform employees are usually self-employed (professional income taxpayers), so the article compares the approaches to taxation of such employees in Russia and in foreign countries. Furthermore, the selfemployed in Russia cannot pay social insurance contributions; the article discusses the approaches of foreign countries to social insurance of the self-employed, as well as the issue of the emergence of platforms’ obligations for social insurance of their employees, considering the application of labor law to the activities of those platforms.
Keywords: online platforms, employment, OECD, taxation, social insurance, self-employed
JEL: K31, K34
Funding: The article was prepared based on the results of research work within the framework of the state task of the RANEPA.
For citation: Girich M.G., Ivanovicheva K.V., Levashenko A.D. (2022). Taxation and Social Insurance for Employees of Online Platforms: Comparison of Russian and International Experience. Financial Journal, vol. 14, no. 3. pp. 44–60 (In Russ.). https://doi.org/10.31107/2075-1990-2022-3-44-60.
© Girich M.G., Ivanovicheva K.V., Levashenko A.D., 2022

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A.F. Kireyeva, M.R. Pinskaya
Providing Incentives for Intellectual Labor through Tax Policy in Belarus, p. 61-73
Abstract
This paper discusses the idea of providing tax incentives for scholars and researchers as a necessary factor in the formation of innovative environment. The research aims at formulating proposals for increasing income from intellectual work through tax incentives based on the analysis of scientific research context and existing tax regime for Belorussian researchers. It is argued that the quantity and quality of intellectual labor depend on the tax regime applied. Academic science environment in Belarus is analyzed and the mechanism of taxation of researchers’ income is discussed in its context. The structure of current costs for research and development is demonstrated. Authors show the insufficiency of the existing tax incentives for intellectual labor, including research grants. The analysis is focused on the mechanism of taxation and collection of social insurance contributions from the remuneration of members of temporary research teams. The authors propose to introduce special tax rules for research income from research activities, and consider these possible rules in detail. The theoretical framework of this article is based on the research of national and foreign scholars in the fields of taxation theory, taxation of individuals, and intellectual capital.
Keywords: tax policy, tax incentives, taxation of labor, research incentives, taxation of grants
JEL: H20, H24
For citation: Kireyeva A., Pinskaya M. (2022). Providing Incentives for Intellectual Labor through Tax Policy in Belarus. Financial Journal, vol. 14, no. 3, pp. 61-73. 
https://doi.org/10.31107/2075-1990-2022-3-61-73.
© Kireyeva A., Pinskaya M., 2022

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O.A. Sinenko, A.Yu. Domnikov
Property Taxation of Companies in Territories With a Special Economic Status, p. 74-85
Abstract
The article is devoted to the study of fiscal mechanisms of regulation of property taxation in the territories with a special economic status. The purpose of this work is to analyze the specifics of property taxes, to assess the value and structure of tax preferences provided, as well as to identify trends in property taxation of companies within the territories with a special economic status. The paper explores the features of property taxation within these territories both in Russia and in foreign countries. It is concluded that in foreign practice tax preferences on property taxes are applied mainly to high-tech companies in special territories. The article analyzes the tax preferences for property taxes in Russia granted to the residents for the period of functioning of special economic zones, territories of advanced socio-economic development and the Free Port of Vladivostok. 
Keywords: property taxes, tax incentives, territories with special economic status
JEL: H20, H21, H25
For citation: Sinenko O.A., Domnikov A.Yu. (2022). Property Taxation of Companies in Territories With a Special Economic Status. Financial Journal, 2022, vol. 14, no. 3, pp. 74–85 (In Russ.). https://doi.org/10.31107/2075-1990-2022-3-74-85
© Sinenko O.A., Domnikov A.Yu., 2022 

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E.V. Ryabova, N.V. Feruleva, O.A. Zamotaeva
Assessing the Investment Attractiveness of Oil Field Development Projects under the Tax Maneuver: The Evidence from West Siberia, p. 86-101
Abstract
The West Siberian economic region remains a territory with high potential of liquid hydrocarbons production, which serve as a reserve for long-term development not only for this region, but for Russia as a whole. Experts claim that Western Siberia provides 70% of Russia’s oil production and accounts for 61% of the mineral extraction tax revenues. According to forecasts of the Ministry of Energy, if oil production is not stimulated, then by 2035 the volume of oil production will significantly reduce and budget revenue will decrease by 4.1 trillion rubles. At present, in order to increase the investment attractiveness of the industry, changes in tax and customs legislation are being introduced. However, the effects of the reforms are not obvious. Employing scenario analysis, the case method and financial modeling on the basis of publicly available information, we assess the impact of changes in tax and customs legislation on the investment attractiveness of oil field development projects. The main hypothesis of the study about the positive impact of the tax maneuver on the attractiveness of projects was partially confirmed. However, in all considered scenarios the internal rate of return does not exceed 13%. This is significantly lower than the global average rate of return for oil and gas industry. This points to the need for further adjustments to the tax and customs legislation to ensure sustainable growth and development of the oil and gas industry. The model created to assess the impact of alternative tax regimes on the investment attractiveness of hydrocarbon exploration and development projects can also be used to identify potential benefits and tax consequences for both the investor and the state.
Keywords: tax maneuver, tax on additional income, export duty, tax legislation, efficiency of investment project, oil fields, West Siberian economic region, investment attractiveness, oil industry
JEL: H22, H32, G17, G38
For citation: Ryabova E.V., Feruleva N.V., Zamotaeva O.A. (2022). Assessing the Investment Attractiveness of Oil Field Development Projects under the Tax Maneuver: The Evidence from West Siberia. Financial Journal, 2022, vol. 14, no. 3, pp. 86–101 (In Russ.). https://doi.org/10.31107/2075-1990-2022-3-86-101.
© Ryabova E.V., Feruleva N.V., Zamotaeva O.A., 2022

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S.V. Bogachov, S.I. Kravchenko
Financial and Tax Regulation of the Housing and Utilities Sector: Foreign Experience, p. 102-115
Abstract
The article is devoted to solving the urgent task of the expanding the sources of extrabudgetary funding of the housing and utilities secor through the use of elements of tax regulation. The purpose of the study is to analyze and summarize the literature on foreign experience in financing and tax regulation of the housing and communal sphere and to assess the possibilities of its application in Russian practice. Methods of comparison, grouping, logical generalization, tabular presentation of data, expert evaluations were used for the study. As a result of the research, the features of the housing and utilities sphere as an object of financial and tax regulation were revealed. The authors characterized the models and methods of financing of sector used in the EU countries, the USA, China and India, including the degree of state intervention, distribution of powers and responsibilities by management levels, use of the mechanism of publicprivate partnership, creation of joint ventures with foreign capital, issue of infrastructure bonds, implementation of energy saving programs. The approaches to issuing municipal infrastructure bonds in the U.S. and India are presented. Attention is focused on the differences in the distribution of EU countries in terms of the volume and structure of the use of the public-private partnership mechanism. The sources of financing for the implementation of energy efficiency projects in the EU countries are systematized. The article analyzes the foreign practice of tax regulation to increase the investment attractiveness of financial instruments in the modernization of utility infrastructure facilities, exemption from taxation of municipal infrastructure bonds in the United States and India, and improving energy efficiency in the housing sector through the use of tax incentives for the implementation of energy efficiency projects and energy service contracts in Italy, the Netherlands, Romania, Slovenia, the Czech Republic and Sweden. The article also substantiates the possibilities of adapting those methods of financial and tax regulation of infrastructure bonds turnover and implementation of energy service contracts to expand non-budgetary sources of the housing and communal sphere financing in the Russian Federation.
Keywords: housing and communal sphere, financial and tax regulation, foreign experience, publicprivate partnership, infrastructure bonds, energy efficiency projects, energy service contracts
JEL: E62, H54, K34
For citation: Bogachov S.V., Kravchenko S.I. (2022). Financial and Tax Regulation of the Housing and Utilities Sector: Foreign Experience. Financial Journal, vol. 14, no. 3, pp. 102–115 (In Russ.). https://doi.org/10.31107/2075-1990-2022-3-102-115.
© Bogachov S.V., Kravchenko S.I., 2022

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P.P. Baboshkin, A.Yu. Mikhailov, Z.A. Sheikh
Sustainable Cryptocurrency Growth Impossible? Impact of Network Power Demand on Bitcoin Price, p. 116-130
Abstract
Due to the youth of the cryptocurrency sphere, the logic of interaction between investors, users and protocols is not always precisely defined. Analysis of the impact of ESG on cryptocurrencies proves that the demand for bitcoin network capacity (occupies the main market share) is the main factor in predicting the price of this cryptocurrency and the cryptocurrency market as a whole. The choice of the statistical method of analysis is determined by the purpose of statistically justified determination of the relationship of the data under consideration, and the reliability of the analysis is checked using Fischer and Student tests. In this paper, several innovations are proposed to solve the problem of energy dependence of cryptocurrencies: firstly, the analysis of cryptocurrencies in the paradigm of sustainable development (taking into account the consumption of a huge amount of energy for the functioning of cryptocurrency systems); secondly, feedback logic to explain the interaction of subjects, including the following parties: users, developers, network infrastructure and their interaction; thirdly, statistical analysis with the creation of artificial variables from real data and iterative improvement of the model. This paper proves that sustainable cryptocurrency growth is impossible when viewed from the perspective of “Green Economics” by Molly Scott Cato. The author's approach is relevant compared to other methods of linear transformations for creating artificial variables by selecting data using the VIF test. As a result, several versions of models were obtained using various combinations of the initially proposed factors, on the basis of which the nature of the greatest influence on the price of bitcoin was established in the form of technical factors and energy infrastructure needs.
Keywords: cryptocurrency, investor behavior, bitcoin, data privacy, ESG factors, concept of green economy
JEL: E52, Q43
For citation: Baboshkin P.P., Mikhaylov A.Yu., Shaikh Z.A. (2022). Sustainable Cryptocurrency Growth Impossible? Impact of Network Power Demand on Bitcoin Price. Financial Journal, vol. 14, no. 3, pp. 116–130. https://doi.org/10.31107/2075-1990-2022-3-116-130.
© Baboshkin P.P., Mikhaylov A.Yu., Shaikh Z.A., 2022

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Financial Journal Vol.14 No.2 2022

CONTENTS

N.E. Barbashova
Approaches to the Modeling and Use of a Long-term Budget Projection at the Regional Level, p. 8-25
Abstract
In compliance with the requirements of the budget legislation the constituent entities of the Russian Federation work out and adopt long-term budget forecasts. The major drawbacks of the current regional forecasts are inadequate methodology of calculating indicators (revenues, expenditures, deficit, debt) and an indistinct role of forecasting in the budgeting process. The article gives specific recommendations on assessing the parameters of revenues and expenditures of the regional budget for a long term horizon. The author focuses on the relationship of the long-term budget forecasts with the other documents of strategic planning (notably, forecasts of socio-economic development). The author suggests various formulas for calculating revenues and expenditures of regional budgets in the long term, as well as options for detailed elaboration of these parameters depending on the availability of background information and the peculiar features of the region. The article also formulates recommendations on the formalized approaches to assess the long-term consequences of the region’s budget policy, as well as to quantify external challenges on a long-term budget forecast model. Approbation of the proposed approaches was carried out on the example of a simulation model based on the data of the Khanty-Mansiysk Autonomous Okrug.
Keywords: long-term budget projection, regional budget policy, revenues and expenditures, balance of the regional budget
JEL: H68
Funding: the article was written on the basis of the RANEPA state assignment research program.
For citation: Barbashova N.E. Approaches to the Modeling and Use of a Long-term Budget Projection at the Regional Level. Financial Journal, 2022, vol. 14, no. 2, pp. 8–25 (In Russ.). https://doi.org/10.31107/2075-1990-2022-2-8-25.
© Barbashova N.E., 2022

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M.A. Pechenskaya-Polishchuk
Attraction of Borrowed Resources to the Budgetary System. Evolution of Scientific Views
and Features of Practical Implementation, p. 26-42
Abstract
The paper carries systematization of a step-by-step evolutionary change in theoretical views on debt financing of public expenditures. A comprehensive analysis of the most important characteristics of the state debt of the constituent entities of the Russian Federation since 2006 has been carried out. Seven situations of varying degree of emergency calling for government support have been identified. These periods are determined by identifying the prerequisites for the emergence, quantitative characteristics, structural deformations of debt and instruments of state regulation. Based on the results of the analysis, it was concluded that the attraction of borrowed budget resources to the regions of the Russian Federation was mainly a forced and spontaneous process, subject to time changes and carried out mainly to make up for the lack of the region’s own budget revenues. The research proves that attracting budgetary resources to the region requires a systematic approach and consideration of two factors: how the region’s own budgetary potential affects the borrowed budgetary resources and how they in turn can affect the region’s own budgetary capacity of current and / or future periods. There are scenarios about impact of borrowed budgetary resources on the territory's own budgetary capacity.
Keywords: public debt, budgetary capacity, budget system, attraction of resources, borrowed resources, economic theory, credit
JEL: H63
Funding: The article was prepared in accordance with the state assignment for the Vologda Research Center of the Russian Academy of Sciences on the topic of research work FMGZ-2022-0012 “Factors and methods of sustainable socio-economic development of territorial systems in the changing conditions of the external and internal environment”.
For citation: Pechenskaya-Polishchuk M.A. Attraction of Borrowed Resources to the Budgetary System.
Evolution of Scientific Views and Features of Practical Implementation. Financial Journal, 2022, vol. 14, no. 2, pp. 26–42 (In Russ.).
https://doi.org/10.31107/2075-1990-2022-2-26-42.
© Pechenskaya-Polishchuk M.A., 2022

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K.V. Shvandar, L.I. Khomyakova
Regional Payment Systems of Asia, Africa, Latin America as a Tool for Regional
Integration. Prospects for the Eurasian Economic Union, p. 43-54
Abstract
The article considers the mutual payment systems of regional associations in Asia, Africa and Latin America in line with the global trend to reduce the share of the US dollar in settlements among countries belonging to trade, regional or integration blocs. We took for the research the Regional Payment System SML (Sistema de Pagamentos em Moeda Local) of the MERCOSUR countries, the Regional Mutual Settlement System SUCRE (Sistema Único de Compensación Regional) of the ALBA countries, the Regional Clearing and Settlement System REPSS (Regional Payment and Settlement System) of the COMESA, Settlement system of the Asian Clearing Union. It reveals features of these mutual payment systems, analyzes their contribution to the servicing of mutual trade turnover (noted such a feature of existing systems as their centric organization). The role of these systems in stimulating the use of national currencies by economic entities has been determined. It is indicated that the dedollarisation processes are closely related to the development of cross-border payments and the achievement of certain agreements on the development of a common payment space among countries of the same region that have economic ties, first of all active mutual trade. Based on the model and data on mutual trade turnover and the currency structure of settlements of the Eurasian Economic Union countries given Latin American, African and Asian experience, it forecasts an increase in the share of their national currencies in the servicing of mutual trade in goods and services. 
Keywords: payments, cross-border settlements, common payment space, Eurasian Economic Union (EAEU), dedollarisation, national currencies
JEL: E42, G15, G23
For citation: Shvandar K.V., Khomyakova L.I. Regional Payment Systems of Asia, Africa, Latin America as a Tool for Regional Integration. Prospects for the Eurasian Economic Union. Financial Journal, 2022, vol. 14, no. 2, pp. 43–54.
https://doi.org/10.31107/2075-1990-2022-2-43-54.
© Shvandar K.V., Khomyakova L.I., 2022

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M.O. Izmailova
The Impact of the Coronavirus Pandemic on Tax Receipts from Self-Employed Citizens
in the Russian Federation, p. 55-72
Abstract 
The coronavirus pandemic has affected all the economies throughout the world, including tax revenues from economic entities. The purpose of this research was to study the development of self-employment in Russia and foreign countries during the spread of a new coronavirus infection and to assess tax revenues from the self-employed to the budget system of the Russian Federation during this period. Within the framework of this research, various approaches to the status of a self-employed person are considered. It has been established that there is currently no single approach to interpreting selfemployment either in the scientific community or in the explanations of various government agencies. Based on statistics from the International Labour Organization, it was found that the scope of selfemployment in the world in connection with the coronavirus pandemic has not changed significantly, and in some countries has even increased, due to the search for additional sources of income by the self-employed, especially in low-income countries (Africa, India). The impact of the pandemic on the income level of the self-employed, the development of certain types of activities in this segment of employment, the turnover of payments made in favor of persons of liberal professions has been established. Despite the fact that the activities of the self-employed in Russia have suffered less from the coronavirus pandemic (unlike foreign countries), the contribution to the budget system of our country from this segment of employment falls below the most pessimistic forecasts. It is concluded that the self-employment segment has a powerful potential for development and is able to provide considerable tax revenues to the budget system of Russia. 
Keywords: self-employment, self-employed, coronavirus, pandemic, taxation, taxation of the selfemployed, tax on professional income, development of self-employment
JEL: Е62, Н25, Н26, H39
For citation: Izmailova M.O. The Impact of the Coronavirus Pandemic on Tax Receipts from Self-Employed Citizens in the Russian Federation. Financial Journal, 2022, vol. 14, no. 2, pp. 55–72 (In Russ.). https://doi.org/10.31107/2075-1990-2022-2-55-72.
© Izmailova M.O., 2022

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V.V. Olkhovik, O.I. Lyutova, E. Juchnevicius
Economic Growth Models and FDI in the CIS Countries During the Period of Digitalization, p. 73-90
Abstract 
This article explores the interrelation between economic growth and foreign direct investments (FDI) in the countries of the Commonwealth of Independent States (CIS) in 1993–2019. The research focuses on the impact of new FDI inflows per capita, as well as the influence of accumulated foreign capital (FDI stock per capita) on GDP growth per capita. This article has aimed to find the causal link between GDP growth and FDI inflows, as well as between GDP growth and FDI stock per capita in the CIS countries. The research methods include: empirical and statistical research, synthesis of practical and theoretical matters, methods of mathematical modelling. Discussion. FDI in the CIS countries are often determined by market size and market growth potential, which ensure a favourable business environment for foreign investors. Data obtained during the analysis suggest that the CIS countries mainly attract market-oriented FDI, which is consistent with the findings of the authors. Thus, the accumulated foreign capital stock has positive impact on economic growth in the CIS countries. Results. Foreign direct investments for economic growth act through such factors as gross domestic product, interest rate, average wages, exchange rate, consumer price index, political stability. The coronavirus pandemic factor is assessed by the authors as negatively affecting the investment attractiveness of countries; the use of digital technologies in handling FDI, according to the authors, is debatable issue. 
Keywords: economic growth models, foreign direct investments (FDI), Commonwealth of Independent States (CIS) countries, digitalization, trade integration, global integration, financial capital
JEL: С23, E27, F43, F47
For citation: Olkhovik V.V., Lyutova O.I., Juchnevicius E. Economic Growth Models and FDI in the CIS Countries During the Period of Digitalization. Financial Journal, 2022, vol. 14, no. 2, pp. 73–90. https://doi.org/10.31107/2075-1990-2022-2-73-90
© Olkhovik V.V., Lyutova O.I., Juchnevicius E., 2022

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A.Yu. Nevela, V.A. Lapshin
Model Risk and Basic Approaches to its Estimation on Example of Market Risk Models, p. 91-112
Abstract 
Model risk is currently a topic of great interest both to the academic community and to the financial industry; however, there is not yet any generally accepted approach to measuring it as of now. We give a review of basic model risk definitions and different indicators and approaches to model risk estimation and calculation within a common setting. The subject of this work is model risk itself that arises while using models to estimate financial risk and its quantitative indicators. The study is of particular relevance to financial institutions which for a long time have been actively applying different risk models. Since there is no generally accepted way to do so, choosing the exact approach becomes an important step in modelling. The aim of the paper is to demonstrate different approaches to model risk estimation on the same example of estimating the model risk of Value-at-Risk models and compare them within one setting. Methods used: analysis of time series, theoretical distribution parameters estimation. The result of the work is a list of methods and approaches for estimating and calculating model risk with the examples of applying these methods to a real risk-management task with appropriate interpretation. This work can be useful for researchers and risk managers of financial institutions. 
Keywords: model risk, method of model risk estimation, conservativeness, accuracy and efficiency of estimations, Value-at-Risk, market risk 
JEL: G32, C53
For citation: Nevela A.Yu., Lapshin V.A. Model Risk and Basic Approaches to its Estimation on Example of Market Risk Models. Financial Journal, 2022, vol. 14, no. 2, pp. 91–112 (In Russ.). https://doi.org/10.31107/2075-1990-2022-2-91-112
© Nevela A.Yu., Lapshin V.A., 2022

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E.Yu. Makushina
Disclosure by Venture Capital Funds Formed Under Investment Partnership Agreement, p. 113-129 
Abstract 
Russia’s private equity and venture capital industry is in the early stages of development. In 2011 the Federal Law on Investment Partnership (335-FZ) was enacted. It brought the best international practices of collective investments into the Russian legal system by making it possible to create venture capital funds through investment partnership. This particular type of funds is the closest in substance to the most popular legal form of globally known venture capital funds which is a limited liability partnership. Significant progress has been made so far in reforming the Russian system of accounting and financial reporting under the IFRS. However, the existing regulations have not been amended to (capture) incorporate accounting and reporting of financial investments, and proper templates for disclosure and reporting by investment partnership funds have not been worked out. The aim of the article is to develop suggestions and recommendations to enhance domestic model of information disclosure by venture capital funds formed under investment partnership agreements. Researching the international practices of disclosure by venture capital funds created as limited liability partnerships allowed to devise financial reporting templates that can be used by domestic venture capital funds formed under investment partnership agreements. These templates proposed in this piece of research can serve as the basis for future industry standards of financial accounting in Russia. 
Keywords: venture capital funds, investment entities, financial reporting, IFRS, fair value 
JEL: M41, O30, O31, G11
For citation: Makushina E.Yu. Disclosure by Venture Capital Funds Formed Under Investment Partnership Agreement. Financial Journal, 2022, vol. 14, no. 2, pp. 113–129 (In Russ.). https://doi.org/10.31107/2075-1990-2022-2-113-129
© Makushina E.Yu., 2022

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Financial Journal Vol.14 No.1 2022

CONTENTS

Vladimir V. Gromov
Features and Problems of Tax Incentives for Small Software Companies in Russia, p. 8-25
Abstract
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

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Oleg M. Skapenker
Institutional Structure of the Russian Financial Market: The Need for Regulatory Transformation, p. 26-38
Abstract
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

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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
Abstract
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

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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
Abstract
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

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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
Abstract
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

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Varvara V. Nazarova, Anastasia A. Ivanova
Payment to Investors Policy Choice: US Market Research, p. 89-107
Abstract
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
JEL: G35
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

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Aleksei A. Batarin
Features of State Regulation of Cash Register Use in the Kyrgyz Republic, p. 108-125
Abstract
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

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Tatiana A. Gorbacheva
Stablecoins As a New Word in the Cryptocurrency Market, p. 126-139
Abstract
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

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Financial Journal Vol.13 No.6 2021

CONTENTS

Olga V. Bogacheva, Oleg V. Smorodinov
Financial Support for Research, Development and Engineering Instruments and Technology Readiness Levels, p. 8-24
Abstract
At present, the methodology of technology readiness levels (TRL) is used worldwide by both public organizations and private companies to address a number of issues. In the system of public support for the development of the science, technology and innovation (STI) sector, TRL is increasingly used as a tool for R&D project management and funding. At the same time, the TRL methodology is not integrated into the budget process in any country in the world, which does not allow the full potential of TRL to be actualized. For Russia, where the role of state scientific and research organizations and public funding of STI is extremely important, this task is a real challenge. As the authors conclude, not only should the TRL methodology be adapted to the tasks of managing budget expenditures for R&D, but the public funding system with its financial instruments should also be adjusted taking into account the requirements of TRL. The key direction of integrating the TRL methodology into the budgetary process is linking of TRLs with elements of types of budgetary expenditures. This task could be accomplished after having taken the following measures: improvement of the budget classification in terms of R&D expenditures; application of a unified project approach to all instruments of state financial support and a unified classification of R&D projects; provision of a unified system for recording expenditures on science; improvement of public support instruments; and determination of the required ratio of R&D funding from budgetary and extrabudgetary sources for various TRL intervals. This work should include development and implementation of a new approach to understanding the boundaries of the STI sector, stages (types) of scientific activities, planning methods and conditions for the provision of public support, as well as improvements in the conceptual apparatus and tools of the support.
Keywords: technology readiness levels; science, technology, and innovation sector; instruments of public support for development; public funding of research and technology development
JEL: O31, O32
For citation: Bogacheva O.V., Smorodinov O.V. Financial Support for Research, Development and Engineering Instruments and Technology Readiness Levels. Financial Journal, 2021, vol. 13, no. 6, pp. 8–24 (In Russ.). https://doi.org/10.31107/2075-1990-2021-6-8-24.
© Bogacheva O.V., Smorodinov O.V., 2021

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Samvel S. Lazaryan, Maria A. Elkina
Financial Sector’s Role in Transmission of Monetary and Fiscal Shocks in Russian Economy:
Estimation Under Different 
Assumptions About Production Sector, p. 25-53
Abstract 
The financial sector plays a crucial role in the economy, not only being a simple intermediary between creditors and borrowers, but also having a significant impact on the economy’s development and its various characteristics. For this reason, accounting for financial sector peculiarities is critical when developing policy-oriented general equilibrium models for practical use. This drives the interest of many researchers in development of approaches to describing the financial sector and financial frictions in DSGE models. In financial frictions models one can describe the production side of the economy in a simplistic way. However, it could be important to model the production sector in more detail. For instance, separating tradable and non-tradable sectors of the economy could be of great significance, especially for developing economies which depend on foreign trade a lot. In this paper we analyze the role of the financial sector and how important it is for transmission of monetary and fiscal shocks under different assumptions about the production sector. Namely, we compare two-sector economy with tradable and non-tradable sectors with a simplistic model which assumes that the economy produces only tradable goods. According to the results, financial frictions impact tradable and nontradable sectors asymmetrically. In the two-sector model the effect of financial frictions is quantitatively smaller than in the one-sector economy. Therefore, using the latter simplifying assumption could lead to overestimating the role of financial frictions in the transmission of monetary and fiscal shocks. In addition, the paper provides estimates of how changes in monetary and fiscal policy instruments impact the Russian economy given the existence of financial frictions. 
Keywords: financial sector, financial accelerator, financial frictions, fiscal policy, monetary policy, DSGE model 
JEL: E60, E52, E62
Funding: The research was funded by the Russian Science Foundation, project 21-18-00482, https://rscf.ru/project/21-18-00482/
For citation: Lazaryan S.S., Elkina M.A. Financial Sector’s Role in Transmission of Monetary and Fiscal Shocks in Russian Economy: Estimation Under Different Assumptions About Production Sector. Financial Journal, 2021, vol. 13, no. 6, pp. 25–53 (In Russ.). https://doi.org/10.31107/2075-1990-2021-6-25-53.
© Lazaryan S.S., Elkina M.A., 2021

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Aleksandra L. Osmolovskaya-Suslina, Sofiia R. Borisova, Victoria A. Moskvina
Integral Tax Collection Index as a New Approach to Assessing Tax Administration, p. 54-80
Abstract
Budget mobilization and improvements in the quality of tax administration are always among the top priorities for fiscal authorities. During periods of instability the role of tax compliance and budget execution increases even more. Times like these require quick analysis and adaptation of the tax system to changing economic conditions, and do not always allow conventional scientific approaches to be used in the analysis of tax collection. Fiscal authorities are faced with the need to create relatively simple tools for assessing that would allow one to analyze revenues with a minimum set of data and to assess the efficiency of the tax authorities taking into account changes in the macroeconomic environment. The integral index of collection presented in this work can help solve this problem. The essence of the approach is to analyze the coherence of two dynamics: actual tax receipts and their proxy tax base. The methodical advantages of the proposed indicator are its relative simplicity and versatility. It is applicable for most of the tax and non-tax payments and can be used both independently and in conjunction with other indicators of tax collection completeness. The above makes the index a convenient tool for quick analysis at different stages of the budget process—it can be useful not only for ex-post understanding of trends in budget revenues execution and tax administration dynamics, but also for improving the accuracy of budget forecasts ex-ante.
Keywords: taxes, budget, tax collection, tax administration
JEL: H22, H26, H68
For citation: Osmolovskaya-Suslina A.L., Borisova S.R., Moskvina V.A. Integral Tax Collection Index as a New Approach to Assessing Tax Administration. Financial Journal, 2021, vol. 13, no. 6, pp. 54–80 (In Russ.). https://doi.org/10.31107/2075-1990-2021-6-54-80.
© Osmolovskaya-Suslina A.L., Borisova S.R., Moskvina V.A., 2021

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Anna V. Tikhonova
Key Issues of Taxation of the Self-Employed in the CIS Countries, p. 81-97
Abstract
The present article examines the prospect of forming a special chapter of the Model Tax Code for the CIS countries, “Tax on Professional Income.” The relevance of this issue is explained by two circumstances—first, a growing share of self-employed citizens, among whom a significant part work outside the legal framework; and second, the possible labor migration of this category of payers between the CIS countries. As a consequence, both factors lead to the need for the formation of common approaches to taxation of self-employed individuals in the member states, codified in the form of a chapter in the Model Tax Code. The purpose of the study is to determine the key elements of the tax on professional income in the CIS countries, which should be indicated in the CIS Model Tax Code as the basic conditions and principles of taxation of self-employed citizens. In accordance with the goal, the author analyzed the tax and labor legislation of the CIS member states, as well as the associated member, the Republic of Turkmenistan. A review of legal acts showed that there is no single conceptual apparatus (“self-employment,” “selfemployed”) in the analyzed countries. This fact prevents the development of a unified approach to determining the circle of taxpayers within the special regime. National legislation has developed three approaches to taxing the self-employed. The first approach is that the self-employed are singled out into an independent category of payers with the presence of the corresponding features of taxation. The second approach consists in the absence of specific conditions of taxation in the presence of a standard individual income tax levied on a general basis. The third approach involves the formation in the construct of a number of taxes and special tax regimes of specific conditions for the taxation of the self-employed. At the end of the article, recommendations are given on the content of a special chapter of the Model Tax Code, taking into account the peculiarities of economic and social development, the state of tax administration, and the “tax” susceptibility of the population of the CIS countries. As an approach to taxation of the self-employed, it is proposed to apply the first one cited, based on the allocation of an independent category of payers.
Keywords: tax on professional income, model tax code, self-employment, imputed income, tax administration, entrepreneurship
JEL: H24, H22, H3
For citation: Tikhonova A.V. Key Issues of Taxation of the Self-Employed in the CIS Countries. Financial Journal, 2021, vol. 13, no. 6, pp. 81–97 (In Russ.). https://doi.org/10.31107/2075-1990-2021-6-81-97
© Tikhonova A.V., 2021

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Аnna A. Mikhaylova, Evgeny N. Timushev
Concept of Vertical Fiscal Imbalance in the Analysis of Fiscal Sustainability at the Regional Level, p. 98-116
Abstract
The paper analyzes the concept and indicator of vertical fiscal imbalance (VFI) and its capability in assessing the creditworthiness (debt sustainability) of Russian regions. It is found that VFI does not replace other indicators of debt and broader fiscal sustainability, but complements them by providing diagnostics of the balance of incoming and outgoing intergovernmental transfers in addition to the balance of expenditures and revenues (budget deficit). Vertical fiscal imbalance has a close inverse pair correlation with the share of own (tax and non-tax) revenues and fiscal capacity, and can therefore reflect creditworthiness (along with the amount of debt and capital expenditures). Technically, it is advisable to carry out an analysis using VFI with a recalculation accounting for subventions. It is concluded that vertical fiscal imbalance is an important element of the methodology of diagnosing fiscal sustainability. Further study of features of the concept, as well as the use of VFI in the analysis and regulation of intergovernmental relations, suggests a promising outlook.
Keywords: fiscal sustainability, dependency on transfer, fiscal capacity, subventions, regional debt, capital expenditures, factor analysis
JEL: H77
Funding: The article was prepared within the framework of the state assignment of the RANEPA.
For citation: Mikhaylova A.A., Timushev E.N. Сoncept of Vertical Fiscal Imbalance in the Analysis of Fiscal Sustainability at the Regional Level. Financial Journal, 2021, vol. 13, no. 6, pp. 98–116 (In Russ.). https://doi.org/10.31107/2075-1990-2021-6-98-116
© Mikhaylova A.A., Timushev E.N., 2021

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Elena B. Veprikova, Aleksei A. Novitskii
Public Expenditure in Regions: Current State and Problems (Exemplified by Registries
of Expenditure Commitments of the Regions in the Russian Far East), p. 117-131
Abstract
Exemplified by regions of the Russian Far East, the article presents a view on the current state and problems of managing regional public expenditures, including the focus of public expenditure on regional development. The research is based on the data from expenditure commitments registries in 2019. A major share of budget expenditures is “compulsory” (pre-determined) expenditures, which have limited flexibility and cannot be redirected to different purposes. Under these circumstances, the ability of regional governments to vary the direction of budget spending and finance self-initiated expenditure commitments—in other words, to independently manage the composition of expenditures—is kept to a minimum, which implies low autonomy in managing expenditures. Most of the Russian Far Eastern regions’ government expenditures are aimed at supporting the current volume and quality of public services. The share of developmental expenditures is higher in regions having more budget resources (Sakhalin Oblast), and significantly lower in regions of the northern Far East (Magadan Oblast, Kamchatka Krai, and Sakha Republic (Yakutia)), the latter having higher costs of supporting critical infrastructure under severe climate conditions. In the present situation, regional governments cannot be fully considered as key influencers managing the development of their territories, and only fill the role of executors and lobbying actors for acquiring financial support from the federal government. As a result, it is difficult to account for specific territorial circumstances and development potential, and the overall efficiency of government spending is decreased. In the authors’ opinion, the findings may be applicable to most regions in the Russian Federation. 
Keywords: government spending, expenditure commitments, regional development, expenditure commitments registry, compulsory expenditures, initiative expenditures, developmental expenditures, microregion
JEL: E62, H50, H61
For citation: Veprikova E.B., Novitskii A.A. Public Expenditure in Regions: Current State and Problems (Exemplified by Registries of Expenditure Commitments of the Regions in the Russian Far East). Financial Journal, 2021, vol. 13, no. 6, pp. 117–131 (In Russ.). https://doi.org/10.31107/2075-1990-2021-6-117-131
© Veprikova E.B., Novitskii A.A., 2021

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Financial Journal Vol.13 No.5 2021

CONTENTS

Problems and Prospects for the Development of a Green Economy in Russia, p. 8-10

Igor A. Yakovlev, Lyudmila S. Kabir, Svetlana I. Nikulina
Changes in Climate Policies and Financial Strategies of Their Implementation in the EU and Russia, p. 11-28
Abstract
The relevance of the research topic is determined by the need to respond to increased climate risks, which makes countries develop climate policies that can effectively meet sustainable development challenges and protect national economic interests. The transformation of climate policy causes the need to shift capital flows from “brown” economy sectors to “green” ones and integrate environmental factors into the process of making financial and investment decisions. At present, the EU is actively developing a climate finance system which will have an impact on the Russian economy. The article is aimed at outlining the changes in climate policies and financial strategies in the EU and Russia, influenced by the global climate agenda. It analyses the volumes and sources of climate finance mobilized by the EU, as well as regional support instruments in the transition period. The article determines the current changes in the Russian Federation’s climate policy. As a result of the research, the authors have come to the following conclusions. The EU is a vivid example of the fact that countries have long moved from climate change debates to the implementation of specific measures. The Russian Federation lags far behind the EU in terms of both mobilizing financial resources to ensure the transition to a low-carbon economy, and developing proven emission control instruments which help to stimulate the reduction of greenhouse gas emissions and fulfill the obligations under the Paris Agreement.
Keywords: climate finance, low-carbon economy, Paris Agreement, European Green Deal, low-carbon development strategy, climate finance instruments, institutional investors
JEL: F64, O44, Q54, Q42
For citation: Yakovlev I.A., Kabir L.S., Nikulina S.I. (2021) Changes in Climate Policies and Financial Strategies of Their Implementation in the EU and Russia. Financial Journal, vol. 13, no. 5, pp. 11–28 (In Russ.). https://doi.org/10.31107/2075-1990-2021-5-11-28.
© Yakovlev I.A., Kabir L.S., Nikulina S.I., 2021

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Larisa V. Sannikova
Legal Framework for Green Finance in the EU and Russia, p. 29-43
Abstract
The climate agenda has recently taken on new significance with global climate change threatening all of humanity. The regulation of green finance instruments needs to be improved in order to attract more money to fight global warming. To ensure investor confidence in green instruments, a common standard for them must be created. The European Union and Russia have been forming a regulatory framework aiming to create national standards for green bonds. The present article analyses the European Commission’s proposed package of measures to help improve the flow of money toward financing the transition to a sustainable economy. The author explores the problems of developing legal regulation of sustainable finance in Russia, especially with regard to the creation of a national taxonomy of green projects and national verification of sustainable financial instruments. The comparative legal study of the EU and Russian draft laws on green finance has demonstrated similar approaches to establishing regulatory rules. The article describes the prospects for green finance in the context of digitalization. Based on a study of best practices (Green Assets Wallet, green bonds, etc.), it is concluded that digital solutions for sustainable finance are currently still not well-developed. In the future, however, their use will significantly increase investor trust in green instruments and reduce costs, in particular through digitalization of the verification process.
Keywords: green finance, taxonomy for sustainable activities, verification of sustainable financial instruments, digital technologies, distributed ledger technologies
JEL: G18, O13
Acknowledgments: This research was supported by the Russian Foundation for Basic Research via grant No. 18-29-16145 MK, “The Mechanism of Legal Regulation of Relations Using the Distributed Ledger Technology”.
For citation: Sannikova L.V. (2021). Legal Framework for Green Finance in the EU and Russia. Financial Journal, 2021, vol. 13, no. 5, pp. 29–43 (In Russ.). https://doi.org/ 10.31107/2075-1990-2021-5-29-43.
© Sannikova L.V., 2021

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Fu Zhihua, Cheng Yu
Promoting Green Development in China's New Development Stage Through Tax Reform, p. 44-50
Abstract
Green growth is not only an important way to build ecological civilization and promote economic transformation, but also the core essence of ensuring high-quality economic development in the new development stage. Optimization of tax system design is a key measure to release institutional dividend to promote green development. From the perspective of tax reform, this paper analyzes the current situation and the challenges of tax greening in China in recent years, and puts forward general thoughts and suggestions on how to promote green development at the new stage so as to create a two-wheel drive mechanism of carbon tax and environmental protection tax, lead the structural reform of China’s tax system, continuously improve tax regulation, and construct a green tax system with multiple taxes and means to cooperate with each other and to regulate it comprehensively and effectively.
Keywords: tax reform, new stage of development, green development
JEL: Q52, Q53, Q56
For citation: Fu Zhihua, Cheng Yu. Promoting Green Growth in China’s New Development Stage Through Tax Reform. Financial Journal, 2021, vol. 13, no. 5, pp. 44–50. https://doi.org/10.31107/2075-1990-2021-5-44-50.
© Fu Zhihua, Cheng Yu, 2021

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Elena I. Kranina
China on the Way to Achieving Carbon Neutrality, p. 51-61
Abstract
Sustainable development is recognized as a concept that can interrupt a series of crises observed today and bring the world to a new effective and fair level. The mechanism for implementing the concept is an approach that integrates into the decision-making process, in addition to the already existing criterion of economic efficiency, ESG-criteria, namely: criteria of environmental friendliness, social responsibility and managerial efficiency. Countries integrate these criteria in different ways into national development strategies. This is due to the nature of the problems they face and the solution of which seems to be a priority. Of great interest in this regard is the experience of China — the largest economy in the world, which has also embarked on a phase of active integration of ESG criteria into the national strategy, with an emphasis on the E-criterion (environmental), assuming that the achievement of efficiency for the rest criteria is impossible without first-priority solution of the accumulated problems in the field of ecology. The main purpose of the article is to analyze the strategic decisions of the Chinese government under the influence of the environmental factor. The article analyzes the approaches to substantiating the ideology of environmental reforms (building an ecological civilization) and its key components, namely: the national climate program, the ecological red line, combating desertification and mitigating climate change, combating water pollution and eliminating water shortages. The following conclusion was made. China has rich and interesting experience in solving the problem of modernizing production, ensuring its rational distribution and reducing the environmental burden on the territory, primarily in the framework of combating environmental pollution and climate change. The Chinese experience may be interesting for other countries, including Russia.
Keywords: China, climate crisis, carbon neutrality, ecology, ecological civilization, green finance, innovative technologies, 14th five-year plan, Silk Road
JEL: Q52, Q56, Q58
For citation: Kranina E.I. China on the way to achieving carbon neutrality. Financial Journal, 2021, vol. 13, no. 5, pp. 51–61 (In Russ.). https://doi.org/10.31107/2075-1990-2021-5-51-61.
© Kranina E.I., 2021

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Rinat I. Rezvanov
Implementation of International Sustainable Financing Practices into the National Debt System.
Can Infrastructure Loans Become Responsible? p. 62-78
Abstract
The article examines the debt instruments of responsible financing, presented in world practice mainly in the form of green bonds, following the common principles of the International Capital Market Association (ICMA). A brief description of each bond issue model is provided: green bonds, social bonds, sustainability bonds, sustainability-linked bonds, and climate transition bonds. For each of the models for issuing responsible bonds, issuing companies are given as examples, with a brief description of the corresponding target parameters. The article focuses on the special measures of federal monetary support to Russian regions introduced in 2021. Based on the adopted comparative typological research method, these measures are analyzed from the standpoint of correlation with the established principles of sustainable financing and accepted widespread (general) international practice. Moreover, attention is paid both to interbudgetaryfinancial instruments presented in the form of infrastructure loans and new infrastructure projects for the purposes of regional economic development, and to the forthcoming issue of infrastructure bonds by Russian financial development institutions (in particular, Dom.RF). It is emphasized that the states themselves, and not only the corporate sector, are becoming active participants in the markets for sustainable financing, realizing the goals of long-term infrastructure development and the implementation of regional economic policies combined with a sectoral approach based on the principles of green economy (exemplified by Germany). A conclusion is made about the possibility of implementing new federal instruments of regional economic support in the system of target principles of sustainable development (ESG criteria). To achieve such a result, a qualitatively deep structuring of the proposed Russian financial instruments for infrastructure development will be required. Above all, this relates to the inclusion in the responsible debt policy instrument methodology of such four core components of the ICMA’s green bond principles (GBP) as the Use of Proceeds (1), Process for Project Evaluation and Selection (2), Management of Proceeds (3), and Reporting (4).
Keywords: green economy, environmental, social, and corporate governance (ESG), responsible investing, sustainable bonds, Russian financial development institutions, interbudgetary relations, infrastructure loans and bonds, spatial and economic development, green finance
JEL: R58, Q56
For citation: Rezvanov R.I. (2021). Implementation of International Sustainable Financing Practices Into the National Debt System. Can Infrastructure Loans Become Responsible? Financial Journal, vol. 13, no. 5, pp. 62–78 (In Russ.). https://doi.org/10.31107/2075-1990-2021-5-62-78.
© Rezvanov R.I., 2021

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Zhanna A. Mingaleva, Yurii V. Starkov
The Role of Environmental Innovation in Green Modernization of Industrial Enterprises, p. 79-92
Abstract
Environmental innovations, green financing, and green investments are currently aimed at implementing such key areas of “greening” the economy and society as reducing emissions of greenhouse gases and various pollutants into the environment. However, the process of green modernization of industrial enterprises is much more diverse and does not only involve environmental measures in relation to direct environmental pollution. The present article reveals the features of the behavior of Russian enterprises and organizations in the field of environmental innovation introduction. The ranking of environmental innovations by directions and goals of implementation is carried out, and their dynamics are analyzed. Particular attention is paid to such a direction of “greening” the economy and production underestimated to date as the activity of replacing raw and other materials with safe or less hazardous ones. The paper demonstrates the importance and significance of this direction of environmental innovation from the point of view of the formation of a green value chain. The main research methods are statistical, structural and logical, and comparative analysis as well as methods of graphical data presentation. The result of the study is the conclusion that it is necessary to increase the attention given by individual enterprises, the business community, investment organizations, the financial sector, government bodies and other subjects of society to such a direction of green modernization of industrial enterprises as the introduction of innovation in the use of environmentally friendly raw and other materials. First and foremost, the above implies an expansion of production and use of composite materials, which have huge application potential in various sectors of the economy, thus generally corresponding to the country’s technological development program.
Keywords: green investment, green industrial modernization, composite materials, green value chain
JEL: Q54, Q56, Q58, Q52
Acknowledgments: This paper is a result of research projects under the code FSNM-2020-0026 financed by the Ministry of Science and Higher Education of the Russian Federation within a state task to Perm National Research Polytechnic University.
For citation: Mingaleva Zh.A., Starkov Yu.V. (2021). The Role of Environmental Innovation in Green Modernization of Industrial Enterprises. Financial Journal, 2021, vol. 13, no. 5, pp. 79–92 (In Russ.). https://doi.org/ 10.31107/2075-1990-2021-5-79-92.
© Mingaleva Zh.A., Starkov Yu.V., 2021

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Victoria I. Bushukina
Specific Features of Renewable Energy Development in the World and Russia, p. 93-107
Abstract
The purpose of the article is to study the theoretical and practical aspects of investment activities in the field of renewable energy in the world and in Russia. To achieve this goal, during the development of theoretical material, a systematic analysis of existing approaches to the assessment of financing mechanisms for renewable energy projects was carried out. Statistical and econometric research tools include correlation analysis and multivariate regression analysis. The article examines the development of renewable energy, its benefits, and investments in the industry. The financial risks and barriers associated with financing renewable energy projects are considered. The development of the industry over the past 10 years is analyzed, taking into account the impact of the COVID-19 pandemic on the electricity industry in general and on renewable energy in a number of countries. It is established that the world is shifting to the use of renewable energy sources, and in Russia they are not being given due attention. It is revealed that the existing thermal generation units in Russia are of great age and are to be decommissioned in the near future. The current state of renewable energy in Russia, measures to support it and the rate of its development are investigated. The technical potential of wind and solar power plants in the Russian Federation is considered within the aim of diversifying electricity production. The factors that negatively affect the development of the renewable energy industry are identified.
Keywords: renewable energy sources, investments, financing, subsidies, renewable energy, electricity
JEL: D22, F34, G23
For citation: Bushukina V.I. (2021). Specific Features of Renewable Energy Development in the World and Russia. Financial Journal, 2021, vol. 13, no. 5, pp. 93–107 (In Russ.). https://doi.org/10.31107/2075-1990-2021-5-93-107.
© Bushukina V.I., 2021

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Igor Yu. Arlashkin
Clustering of Russian Regions by Level of Debt Sustainability, p. 108-124
Abstract
The subject of the paper is the assessment of regional debt sustainability in accordance to the Budget Code of the Russian Federation. The relevance of the study is due to the aggravation of the regional debt problems at the end of 2020 and the need to have an assessment system that allows to timely respond to a decrease in the level of regional debt sustainability. The novelty of the study consists in the analysis of the system of debt sustainability indicators and their threshold values using the methods of cluster analysis. The article aims to examine if the current assessment system allows to classify regions by the level of debt sustainability quite clearly. As a result of the study, it was shown that the used debt sustainability indicators partially duplicate each other, and the methods of their calculation and the established threshold values discriminate against subsidized regions. In addition, it was shown that the grouping of regions based on the current assessment system does clearly distinguish between regions with high and medium levels of debt sustainability. The conclusion of the study is that in order to improve the system for assessing debt sustainability, it is necessary to change the set of debt sustainability indicators and the procedure for calculating them, as well as to set appropriate new threshold values for the new set of indicators. The prospect of the study is to conduct a similar analysis based on data for 2020 and refine new thresholds for debt sustainability indicators.
Keywords: subject of the Russian Federation, debt sustainability, cluster analysis, Ward’s method, k-means clustering, regional debt, regional debt, debt service, debt repayment
JEL: H63
Funding: the article was written on the basis of the RANEPA state assignment research programme
For citation: Arlashkin I.Yu. Clustering of Russian Regions by Level of Debt Sustainability. Financial Journal, 2021, vol. 13, no. 5, pp. 108–124 (In Russ.). https://doi.org/10.31107/2075-1990-2021-5-108-124.
© Arlashkin I.Yu., 2021

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Natalia S. Matveeva
Legislative Regulation Financial Statement Preparation by Micro Entities: International Experience, p. 125-138
Abstract
The article analyzes the experience of legislative regulation of financial statement preparation by micro entities in the Commonwealth of Independent States, the European Union, and the United Kingdom. The legislative acts of the countries, national accounting standards and financial reporting standards serve as the methodological basis for the analysis. For the purpose of this study the article identifies the criteria for categorizing an organization as a micro entity, analyzes the documents regulating the procedure for the preparation of financial statements, and compares the procedures for financial reports formation by micro entities in different countries. Micro entities are an important component of the country’s economy, affecting the level of employment, gross domestic product and other important indicators of the country’s development. In Russia, micro entities account for 96 percent of the small and medium-sized business sector, whose share in the gross domestic product was about 20.6 % in 2019 according to Federal State Statistics Service estimates and which created about 33 % of jobs. For comparison, in the OECD countries small and medium-sized businesses generate, on average, about 55 % of GDP and about 59.1 % of jobs, whereas in the EU countries the percentage is higher: 57.5 % of GDP, and 65 % of the employed. However, in order to support the development of micro entities, it is necessary to create favorable conditions for the implementation of entrepreneurial activities, in particular through simplifying the procedure for the formation and submission of financial statements.
Keywords: financial statement, micro entities, financial reporting standards, financial legislation, international experience
JEL: E62, H83, M48
For citation: Matveeva N.S. Legislative Regulation Financial Statement Preparation by Micro Entities: International Experience. Financial Journal, 2021, vol. 13, no. 5, pp. 125–138 (In Russ.). https://doi.org/10.31107/2075-1990-2021-5-125-138.
© Matveeva N.S., 2021

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Scientific periodical

ISSN 2658-5332