Sustainability of the Value-Added Tax Revenues: Myth or Reality?

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, Candidate of Economic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Ilya А. Sokolov – Head of Budget Policy Department of the Russian Presidential Academy of National Economy and Public Administration; Director of the Institute for Macroeconomic Research, Russian Foreign Trade Academy, Candidate of Economic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Olga V. Suchkova – Younger Researcher of the Russian Presidential Academy of National Economy and Public Administration; Senior lecturer of Department of Mathematical Methods in Economics, Faculty of Economics of Lomonosov Moscow State University (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

The 2020 pandemic has put on the agenda the issue of the sustainability of the Russian budget system again. The reduction in revenues occurred in almost all taxes received by the federal budget. Preliminary data on the federal budget implementation show that ratio of VAT revenues to GDP has decreased the least. In this paper, however, it was shown that VAT revenues are both significant and quite procyclical, which in turn increases the requirements for the strictness of the budget rule and the discipline of its application. Otherwise, there will be an inevitable deterioration in long-term fiscal sustainability.

The article was written on the basis of the RANEPA state assignment research programme.

Key words: Value-added tax, fiscal procyclicality, budget sustainability.