INSTITUTIONAL PARADOXES OF VAT UNDER DEVELOPING ECONOMY OF TRANSITION PERIOD

Abstract

Objective: to determine the characteristics of the destructive impact of VAT taxation on the socio-economic situation of the Russian Federation. Methods: the research is based on the complex economic and legal methodology, including the institutional approach, with the account of the national socio-economic and legal realities determining the conditions of functioning of branches and particular enterprises in the Russian economy. Results: the conditions and characteristics of the introduction of VAT in the Russian Federation are viewed; the reasons are revealed for the formation and development of the problem-causing VAT in the domestic tax system; the socio-economic implications of VAT are analyzed; the viability of replacing VAT for a turnover tax is demonstrated. Scientific novelty: for the first time the conceptual position is articulated that, under the realities of the reformed Russian economy, the normative-legal outline of the VAT complements the accumulated destructive potential, blocking the way to the industrial growth in the national economy, enhances the asymmetry of conditions of different forms of ownership, while the actual conditions of the transition period in Russia do not correspond to the main idea and purpose of VAT as an institution aimed at the efficient relocation of a significant part of the newly created value added to the social sectors and at the modernizing effect on the productive forces for technological improvement in industry. Practical significance: the provisions and conclusions of the article can be used when discussing issues on the need for the VAT reform in the Russian Federation, including switching to the turnover tax.

Keywords

• taxation law
• vat
• legal regulation of taxation
• principle of the economic feasibility of tax
• vat rate
• concept of development of the taxation system