Specifics of the Work of Tax Authorities in the Context of a Pandemic

Larisa Aslanbekovna Aguzarova

and Fatima Savkuevna Aguzarova

North-Ossetian State University named after K.L. Khetagurov, Vladikavkaz, Russia

Keywords: Digital Technologies, Tax Authorities, Tax Payments, Tax Administration.

Abstract: Events related to the spread of a new coronavirus infection have left their negative imprint on the economy

not only of Russia, but also of other foreign countries. All sectors of the economy have suffered. A kind of

locomotive in this whole story can be called the work of the Federal Tax Service of Russia. The new methods

of work of the tax authorities have maximally ensured the economic security of the state at the expense of

taxes and fees received by the budgets of the budgetary system. The authors note that the introduction of

restrictive measures during the pandemic left no other option but to work remotely. In this regard, the

leadership of the Federal Tax Service of Russia has made a fair decision to improve, disseminate and apply

digital technologies in the work of tax authorities. Based on the results of the study, reasonable conclusions

were made that the mechanism of work of tax authorities is still imperfect and needs further improvement. It

is advisable to improve the quality and efficiency of the activities of tax authorities by ensuring full and timely

receipt of tax payments to the budgets of the budget system by carrying out work on automation and

development of the control and analytical system, identifying illegal tax optimization schemes, continuing the

development of services and digital programs.

1 INTRODUCTION

The pandemic has affected all spheres of the economy

and affected every inhabitant of the planet. The

sudden spread of a new viral infection has adversely

affected not only the economy of Russia, but also

foreign countries.

In this study, we will consider how the epidemic

affected the organizational and functional work of tax

authorities, as well as macroeconomic indicators. The

state's tax policy is one of the most important tools for

countering epidemiological threats and improving

economic security.

The unfavorable economic situation forced the

authorities to resort to new methods of work of all

participants in tax legal relations. In particular,

restrictive measures were introduced, the work of

most employees was organized in a remote format

(100% of the document flow was transferred to

electronic form), taxpayers filed tax reports remotely

through their personal account.

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https://orcid.org/0000-0002-2607-3932

https://orcid.org/0000-0003-2699-8561

2 RESEARCH METHODOLOGY

Thus, the organizational work in the tax authorities

has changed markedly. Regional situational centers

(Territorial Situational Centers) began to function in

them. Such centers have been established in every

subject, in every inspection. The newly created

centers were engaged in explanatory work on

measures to support the economy, collecting

analytical and other information, monitoring at macro

and micro levels, as well as analyzing the situation in

the economy at all levels.

All the information received by the Regional

Situation Centers was promptly processed, sorted out,

analyzed by specialists and sent to the head Federal

Situation Center of the Federal Tax Service of Russia.

Based on the results of the assessment and analysis of

the current state of the economy, grounded

government decisions on support measures were

taken subsequently.

It is important to note that the situation centers

interacted with taxpayers, business entities, ministries

and departments, and other necessary structures.

244

Aguzarova, L. and Aguzarova, F.

Speciﬁcs of the Work of Tax Authorities in the Context of a Pandemic.

DOI: 10.5220/0011118600003439

In Proceedings of the 2nd International Scientiﬁc and Practical Conference "COVID-19: Implementation of the Sustainable Development Goals" (RTCOV 2021), pages 244-248

ISBN: 978-989-758-617-0

It can be said that situational centers have become

a digital platform for the formation of operational and

up-to-date information in order to make adequate

management decisions at the state level during the

pandemic, since a large amount of work is carried out

remotely using digital products.

Individual enterprises were granted installments

and deferrals provided for by Chapter 9 of the Tax

Code of the Russian Federation, as well as tax

authorities changed the rates and terms of payment of

taxes, fees, insurance premiums. For example,

insurance premiums were reduced for small and

medium-sized businesses, and the corporate income

tax rate was reduced from 20% to 3% for the IT-

sector. Individual enterprises have received the right

to lower corporate income tax on the amount spent on

the purchase and modernization of equipment.

At the same time, not all organizations and

enterprises retained their financial viability despite

the fact that assistance was provided. Thus, additional

tax restrictions were imposed, nevertheless,

organizations were ruined, jobs were cut, etc.

Consequently, this directly affected the revenue

figures for taxes and fees, as well as special tax

regimes.

3 RESEARCH RESULTS

The tax restrictions introduced during the pandemic

reduced the planned tax indicators. In 2020, all

revenues administered by the tax authorities

amounted to 28,213 billion rubles, which is 5.3% less

than the same indicator in 2019. It is important to note

that due to the reduction of insurance premiums,

deferrals, installments and tax write-offs, the country

lost up to 1 trillion rubles. Tax revenue indicators

were affected by income from the payment of mineral

extraction tax. The level of collection of this tax

directly depends on the price of oil.

Meanwhile, actions are envisaged according to

which the tax revenues of the budgets will increase.

Since 2021, the mineral extraction tax benefit for

developed fields has been canceled, which, according

to experts, will increase budget revenues by 260

billion rubles. The taxation system of the oil industry

includes irrelevant, economically unjustified tax

benefits. All over the world, companies that extract

minerals pay royalties to the state from the prices of

resources. In Russia, rent is paid from the cost of

production costs, which is several times less than the

market price for resources. The mineral extraction tax

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Automated control system.

rate for oil is 40-50% of revenue, gas - 15%, precious

stones - 8%, precious metals - 6%, solid minerals -

0.5-0.6%. If compared with other countries, in a

number of states the latter indicator is 2-6%.

Tax revenues of the budget will increase, among

other things, due to excise receipts, since excise taxes

on tobacco products have been increased by about

20%. In absolute terms, the increase amounted to

about 70 billion rubles.

The personal income tax received by the budgets

of the constituent entities of the Russian Federation

showed high dynamics in 2020. Since 01.01.2021, the

basic rate of 13% has been increased to 15% for

citizens with an annual income of more than 5 million

rubles. This approach is considered more fair

worldwide. Thanks to this, according to experts, in

2021-2023, the budget will receive an additional 190

billion rubles. This income is planned to be used for

the treatment of children with severe (orphan)

diseases. It should be noted that now the

administration of personal income tax on incomes

over 500 million rubles is carried out in a specialized

interregional inspection. The new inspection is tasked

with high-quality, professional administration of

taxpayers, so that information on specific categories

of taxpayers flows into one inspection for better

administration and control. It is important to take into

account that the changes will not affect the revenues

of the budgets of the subjects, since the taxes

transferred to the new inspection will go to the budget

at the place of registration of an individual. A

specialized interregional inspection will only monitor

the correctness and timeliness of tax payments.

Positive dynamics has been demonstrated for

property taxes, despite the fact that in some cases tax

rates have been reduced and payment deadlines have

been postponed to the current year.

Despite the decline in gross domestic product

(GDP), value added tax receipts (VAT) receipts

increased relative to a prosperous 2019. This result

was obtained through the operation of an automated

control system - ASK

VAT- 2.

Thus, it is planned to restore the budget losses

incurred on the basis of taxes such as the mineral

extraction tax, excise taxes, personal income tax,

value added tax.

4 DISCUSSION OF THE RESULTS

The Federal Tax Service (FTS of Russia) is an

executive authority that exercises control and

Speciﬁcs of the Work of Tax Authorities in the Context of a Pandemic

245

supervision in the field of taxes, fees and other

mandatory payments.

In the context of a pandemic (quarantine), the use

of digital resources in the activities of tax authorities

is becoming increasingly relevant. It was with the

help of electronic programs that the uninterrupted

operation of the service and its structural units was

ensured in a remote format during quarantine.

Using digital technologies, the costs of

administration of tax payments have been reduced,

the procedure for calculating and paying taxes and

fees has accelerated, it has become easier to work

with big data, the workload of employees has

decreased, excessive document flow has decreased,

as a result, the performance indicators of control work

have increased. It should be noted that the practice of

using digital programs is already available, but it is

not yet sufficiently developed and requires

improvement (failures, non-standard situations often

occur, parameters in the programs themselves are not

fully reflected, etc.).

Of course, the spread of software resources has

changed the principles of management and

organizational work of tax authorities.

It should be noted that as a result of large-scale

automation, measures are being applied to strengthen

the interaction of all participants in tax legal relations

through electronic databases, as well as to increase

the level of collection of tax payments in the budgets

of the budget system, since the use of digital

technologies allows the most effective

implementation of control measures of tax

inspections.

The interaction of the tax authority with other

structures is a single integrated system that unites the

activities of the inspection. It is aimed at the

functional principle of operation.

The continuous work of tax authorities during the

pandemic has maintained effective indicators on the

level of tax collection. Although, the number of on-

site tax audits in 2020 was reduced.

At the same time, the Federal Tax Service of

Russia has created an API interface (application

programming interface, application programming

interface), which allowed companies to use the

information of receipts for bonuses to customers,

interested consumers to check checks, creating a

system of civil control over fiscal discipline and

prices. The buyer can check the receipt through the

smartphone application and make sure that he

purchased the goods from a legal seller at the stated

price.

In 2020, a new institute of the Unified Tax

Account (UTA) was introduced, which made it

possible to provide a transparent and understandable

environment for interaction with the taxpayer for

comfortable and easy performance of his duties on

paying taxes.

In addition, from 2021 there is no need to file tax

returns on land and transport taxes for organizations,

which reduces costs and time. It should be noted here

that the tax authorities face the task of maintaining

effective control over the receipts of these taxes.

For small and medium-sized businesses, new

digital products are also provided, which are created

in their favor. Namely, a Unified register of small and

medium–sized enterprises (hereinafter referred to as

SMB) has been formed in order to receive support.

This register is posted on the website of the Federal

Tax Service of Russia at the end of 2020 and reflects

instant information about who and when the support

was provided, what results were obtained.

Thus, for taxpayers included in the Unified

activity relates to the branch of the Russian economy

that has suffered the most in the conditions of

deterioration of the situation as a result of the spread

of coronavirus infection, the terms of payment of

advance payments for 2020 have been postponed as

follows:

on corporate property tax:

 for the 1st quarter of 2020 - from 06.05.2020 to

30.10.2020,

 for the 2nd quarter of 2020 - from 05.08.2020

to 30.12.2020;

on transport tax:

 for the 1st quarter of 2020 - from 05.15.2020 to

10.30.2020,

 for the 2nd quarter of 2020 - from 08.17.2020

to 12.30.2020;

on land tax:

 for the 1st quarter of 2020 - on 30.10.2020,

 for the 2nd quarter of 2020 - on 30.12.2020.

It is important to take into account that the choice

of a special tax regime or the transition of taxpayers

to other special tax regimes can be carried out

remotely, the service "Choosing a suitable tax

regime" is available on the website. The provision of

this service is very convenient for entrepreneurs, it

saves, first of all, time. At the same time, a number of

laws were adopted to adapt the patent and simplified

taxation system for the transition from the unified tax

on imputed income (UTII), which was canceled from

01.01.2021. The deadline for submitting the

notification of the transition to the simplified taxation

system (STS) was extended until 31.03.2021.

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Business support measures were actively applied

in many regions of the Russian Federation during the

pandemic. A positive phenomenon is the cancellation

of reporting from 2022 for organizations paying the

STS, applying the cash register equipment (CRT)

with the "income" regime.

The online CRT (cash register equipment) project

has become a serious digital product. For business,

the project made it possible to eliminate 9 forms of

cash reporting and significantly reduce the number of

inspections.

Since 2020, entrepreneurs have the right to apply

preferential treatment in the form of a tax on

professional income. This tax regime has no

analogues in the world and is fully implemented in

the mobile application "My Tax" with the click of a

button. Minimum professional income tax rates are

considered attractive - 4% relationship with citizens,

6% - with organizations. Self-employed citizens can

also independently form electron pension savings. So,

in 2020, the number of self-employed in Russia

amounted to more than 1.7 million individuals.

Dashboards (unique software for analyzing and

collecting data in real time) with information about

the number of self-employed in the region, including

income received, amounts of checks and taxes paid,

where you can observe the overall picture in real time,

have been developed with the use of digital

technologies for the heads of the constituent entities

of the federation.

It is important to note that in 2020, a DPC-4 (data

processing center) was created, the capacities of

which will be used to monitor the implementation of

national projects. The DPC system allows you to

implement projects to create digital platforms - this is

an important component of the digital Government of

the future. Today, DPC - are the basis of the tax

system, as they provide a clear and well-established

process of working with a huge array of information

about the activities of all taxpayers. The quality of the

work of the tax system and the convenience of

citizens who receive public services depend on this.

The right step of the Federal Tax Service of

Russia should be considered the creation, together

with the Ministry of Finance, of a digital platform for

collecting and analyzing data on tax expenditures,

which is of crucial importance for the subjects of the

Russian Federation. The platform contains data on all

federal and regional benefits, and also has a flexible

tool for analyzing and evaluating the effectiveness of

benefits in the context of regions, All-Russian

classifier of types of economic activity, individual

organizations.

Despite the fact that a lot has been done in terms

of digitalization in the activities of tax authorities, it

is planned to further develop this area.

According to the head of the Federal Tax Service

of Russia, proactive development of services for

businesses and citizens is seen as its first task. It is

planned to solve this problem by developing a line of

personal accounts for all categories of taxpayers,

where all the functionality of interaction with tax

authorities is collected at a single point, divided by

life situations. This will allow taxpayers to

independently switch to interaction with tax

authorities through their personal account as much as

possible.

An equally important task of the Federal Tax

Service of Russia should be called the creation of a

Digital analytical platform of the Federal Tax Service

of Russia, which will be used for the needs of

statistics and electronic services. And also for

information support of regional authorities. The

creation of the platform will make it possible to

reduce and improve the efficiency of budget

expenditures by more accurately identifying problem

areas in the economy and social sphere and abolishing

certain forms of statistical reporting.

Another task of the Federal Tax Service of Russia

is the creation of an electronic document management

system between economic entities in the economy.

This task of the tax authorities is the highest priority

in the near future. Its implementation will make it

possible in the future to abandon traditional tax audits

that are currently in practice, free taxpayers from

reporting, perform all routine fiscal functions and not

distract business participants from entrepreneurial

activities.

5 CONCLUSIONS

Thus, the mechanism of work of the tax authorities is

still imperfect and needs further improvement, since

there are problems and unresolved issues in it. It is

advisable to improve the quality and efficiency of the

activities of tax authorities, and thereby ensure the

full and timely receipt of tax payments to the budgets

of the budgetary system.

The Federal Tax Service of Russia and its

structural divisions should ensure the dynamics of tax

receipts and insurance premiums at a level

corresponding to economic indicators, carry out work

on automation and development of a control and

analytical subsystem (CAS) that identifies the

analysis of illegal tax optimization schemes using the

professional income tax regime, develop a concept

Speciﬁcs of the Work of Tax Authorities in the Context of a Pandemic

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for the functioning of the Digital platform of the

Federal Tax Service of Russia for providing

administrative data, to continue the development of

services that simplify the solution of issues in specific

life situations as much as possible, including the

creation of a service that allows citizens to receive the

most popular tax deductions for personal income tax

in a proactive mode.

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