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Federal Budget in H1 2019: VAT Share in Tax Revenues up

Tatyana V. Tischenko – Senior Researcher of the Gaidar Institute; Senior Researcher of the Russian Presidential Academy of National Economy and Public Administration, Candidate of Economic Sciences (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Sergey G. Belev – Head of Budget Policy Department of the Gaidar Institute; Senior Researcher of the Russian Presidential Academy of National Economy and Public Administration (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

The federal budget revenues by H1 2019-end moved up by 0.4 p.p. of GDP against the same period of the previous year, first of all, due to increased VAT rate from 18 to 20%. Simultaneously, expenditures have contracted by 0.9 p.p. of GDP. As a result, the federal budget was executed with surplus amounting to 3.3% of GDP. However, these results do not give occasion for optimism especially from the point of view of risks for the revenues part of the budget. For example, oil prices can go down, excises are not the significant source of the budget replenishment and the VAT rate increase has adversely affected domestic consumption and imports.

One should expect significant growth of expenditure in H2 as long as cash execution especially of certain national projects was lagging behind during H1. Consequently, the federal budget surplus can decline.

Key words: federal budget, taxes, revenues, oil and gas revenues, non-oil and gas revenues, expenditures, state foreign debt.