Financial Journal

p. 28-43

Authors: Elena N. Timchenko, Alexander I. Pogorletsky

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.

p. 61-73

Authors: Alena Kireyeva, Milyausha Pinskaya

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.

p. 86-101

Authors: Elena V. Ryabova, Natalia V. Feruleva, Olga A. Zamotaeva

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.

p. 116-130

Authors: Pavel Baboshkin, Alexey Mikhaylov, Zaffar Ahmed Shaikh

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.

p. 26-42

Authors: Mariya A. Pechenskaya-Polishchuk

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.

p. 55-72

Authors: Maria O. Izmailova

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.

p. 91-112

Authors: Andrey Yu. Nevela, Victor A. Lapshin

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.

p. 26-38

Authors: Oleg M. Skapenker

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.

p. 56-70

Authors: Vladislav N. Rutskiy, Ilia A. Filippov

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.

p. 89-107

Authors: Varvara V. Nazarova, Anastasia A. Ivanova

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.

p. 126-139

Authors: Tatiana A. Gorbacheva

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.

p. 25-53

Authors: Samvel S. Lazaryan, Maria A. Elkina

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.

p. 81-97

Authors: Anna V. Tikhonova

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.

p. 117-131

Authors: Elena B. Veprikova, Aleksei A. Novitskii

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.

p. 29-43

Authors: Larisa V. Sannikova

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.

p. 51-61

Authors: Elena I. Kranina

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.

p. 79-92

Authors: Zhanna A. Mingaleva, Yurii V. Starkov

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.

p. 108-124

Authors: Igor Yu. Arlashkin

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.