Paper/Speech Details of Conference Program for the 29th NISPAcee Annual Conference Program Overview WG5: Public Finance and Public Financial Mngmt. (Physical) Author(s) Vladimir Tyutyuryukov I do not belong to any Institution Belgrade Serbia Title Taxing personal income: do EAEU Member States ensure fairness and sustainability? File Paper files are available only for conference participants, please login first. Presenter Vladimir Tyutyuryukov Abstract Background and research question Many countries, including Eurasian Economic Union (EAEU) Member State, have been incorporating the ideas of poverty reduction and decent employment conditions into their domestic policies. According to official statistics, the share of population below national poverty line in 2018 was 12.9% Russia, 22.4% in Kyrgyz Republic and 23.5% in Armenia; in August 2020 EAEU reported that the unemployment in it quadrupled compared to the previous year, which further deteriorates the living standards in its Member States. Many countries introduced some tax measures designed to support the enterprises affected by lockdowns and shrinking economic activities during Covid-19 pandemic, as well as their employees: the exemptions from fringe benefits tax, simplified personal tax accounting rules wage tax rebate for certain employers, deferral of certain payroll tax obligations, prolonged deadlines for filing tax returns and tax payments. In Russia the President introduced “paid non-working days” from 30 March through 11 May 2020, effectively shifting the burden of people’s support to the businesses (which had also to pay respective personal income tax (PIT) and social security contributions) irrespective of their ability to work. The Government postponed the deadline for submission of tax returns by 3 months, but didn’t delay the tax payments for most businesses. The companies often reported that they ran out of cash during non-working days and had to opt for reduced salaries, leaves of absence, employment termination or bankruptcies. Following the above controversy in Russia, this research focuses on the review and comparison of national tax policies of EAEU Member States in respect of personal income tax and social security contributions (or similar payroll taxes). The goal is to determine such measures and compare their efficiency. So the research questions of this paper are: Are policies of EAEU Member States on personal income taxation designed to ensure fairness and sustainability? And do the special measures introduced to offset the effect of pandemic help to achieve sustainability? Data and methodology Methodology of this research includes two main approaches. First, there is an analysis of tax law provisions with focus on those features of PIT (affecting the people’s revenues) and social security contributions (or similar payroll taxes; increasing labor cost for the employers) which may result in support of people with lower income by retaining more funds in their hands compared to average situation. Second approach is the analysis of empirical statistics on respective amounts withheld from or retained at the hands of people. Baseline is a person with an average income for the respective country, his PIT and social security contributions, and income in excess over minimum subsistence level retained by that person. Next, we introduce variations considering organizations and/or people covered by anti-Covid-19 tax measures and determine effect of respective delay or abolishment of taxes and contributions (and reimbursements, if any) in each of EAEU Member States.
