Elements of the Tax System and the Mechanism of Their Interaction

Musa Shamsudinovich Basnukaev

1,2 a

and Reseda Ruslanbekovna Madaeva

Chechen State University, Grozny named after A.A. Kadyrova, Grozny, Russian Federation

Laboratory of Economic Research, Integrated Research Institute named after H.I. Ibragimova RAS, Grozny, Russian

Federation

Keywords: Taxes, taxation, tax mechanism, elements of the tax system.

Abstract: Taxes are a complex and multifaceted phenomenon that concentrates a wide range of political, legal and socio-

economic relationships in society. The construction of the taxation system is based on a compromise between

the interests of the state and taxpayers, which makes it possible to provide opportunities for the development

of the economy of the country and its constituent regions. The mechanism of interaction between the elements

of taxes, the tax system, the tax system is very important in shaping the strategy of the tax policy of any state,

which is very important for Russia with its three types of budgets, complex financial structure, due to the

large extent of the territory, the unevenness of its settlement, various production base. An analysis of the main

elements of the tax will make it possible to draw correct conclusions about the nature of the tax, the content

of the tax system, identify some patterns of its development and make proposals aimed at improving its

effectiveness.

1 INTRODUCTION

The expediency of considering the interaction of

elements of the tax system is due to the fact that it is

included in the concept of "tax mechanism", the

improvement of which by optimizing the tools is a

very important area of modern research by scientists.

In addition, in order to strengthen not only the

horizon of research, but also its depth, a general

theoretical consideration of this content will reflect

the area of tax theory in which the action of the

elements of the tax mechanism is delimited by a

number of subsystems that are characterized by

reproductive, control and regulatory functions. The

latter function, or rather its implementation at the

national level, determines the degree of centralization

of tax flows by the authorities of the territories, which

has worsened since 2002, when local budgets lost

their stable and long-term share of the most collected

taxes in their territories - VAT and income tax.

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2 MAIN PART

It is quite obvious that the imbalance of the elements

of the tax system manifested itself in the imperfection

of the acts and measures taken by the state in the field

of taxes. One of the biggest manifestations of this

imbalance was the duplication in taxation during the

withdrawal of taxes, that is, their doubling, which is

typical for a functioning taxation system.

The development of an optimal model of

economic relations, from the point of view of

observing the financial interests of the state and

taxpayers, especially in municipal territories, should

be facilitated by the tax policy implemented over the

past years (Artamonov, 2020).

One of the main tasks of tax policy at the present

stage is the creation of favorable conditions for the

active financial and economic activity of economic

entities and the stimulation of economic growth by

achieving a combination of personal and public

interests, i.e. the optimal ratio between the funds

remaining at the disposal of the taxpayer and the

funds that are redistributed through tax and budgetary

mechanisms.

114

Basnukaev, M. and Madaeva, R.

Elements of the Tax System and the Mechanism of Their Interaction.

DOI: 10.5220/0011555700003524

In Proceedings of the 1st International Conference on Methods, Models, Technologies for Sustainable Development (MMTGE 2022) - Agroclimatic Projects and Carbon Neutrality, pages

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ISBN: 978-989-758-608-8

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Solving this problem is important for improving

the tax mechanism of grassroots budgets, most of

which have had a budget deficit for a long time. The

success of the economic decisions largely depends on

the successful implementation of tax policy. Only the

tax policy that stimulates accumulation and

investment and promotes economic growth can be

considered effective, which is especially important

today for the Russian state (

Shchukina, 2018).

In order to determine its content, it is necessary to

return to the study of the essence of its main category

- tax. Among the many questions of the theory of

taxes, the question of the nature of the tax, the content

of this concept, is still relevant. It must be assumed

that it reflects two sides of the tax. One of them

consists in the alienation to the state in accordance

with the established procedure of a part of the

property of the payer. The second reflects the content

of the concept of "tax" as more capacious, namely, a

complex system of relations associated with the

definition, establishment and withdrawal of tax.

The tax consists of separate parts, elements, each

of which reflects its specific meaning: economic,

legal, and is considered established only when all its

elements are legally fixed. As you know, the elements

of the tax, defined by individual components, are

enshrined in the Law on the Fundamentals of the Tax

System. The elements of the tax are the anatomy of

the tax, its internal structure.

The mechanism of interaction between the

elements of taxes, the tax system, the tax system is

very important in shaping the strategy of the tax

policy of any state, which is very important for Russia

with its three types of budgets, complex financial

structure, due to the large extent of the territory, the

unevenness of its settlement, various production base

(Basnukaev, 2021).

Revealing the mechanism of interaction between

the elements of the tax system, one cannot do without

clarifying the concepts of "tax system" and "tax

system". First of all, the concept of "tax system" is

much broader than the concept of "tax system", which

is an integral part of the tax system. At the same time,

it should be noted that throughout the entire period of

functioning of any tax system, both the tax system

and the tax system change.

The tax system, which also consists of separate

elements, includes elements of all types of taxes and

elements of the taxation system, characterized by the

principles of construction and organization of tax

collection. The structure of the tax system can be

compared with human anatomy, where each

individual organ has its own structure, where the

functional dependencies of these organs are

determined and their influence on the state of the

human body as a whole is revealed (Krokhyna, 2020).

A detailed analysis of the main elements of the tax

will make it possible to draw correct conclusions

about the nature of the tax, the content of the tax

system, identify some patterns of its development and

make proposals aimed at improving its effectiveness.

To characterize the main elements related to the

definition of "tax", let's consider their content from a

legislative point of view (

Sharapova, 2019).

First of all, a tax (fee, duty) is a mandatory

contribution to the budget of the appropriate level

(federal, regional, local), carried out by the taxpayer

in the manner and on the conditions determined by

law.

Subjects of taxation or payers of tax - legal entities

and individuals who are obliged in accordance with

the law to pay taxes. The main feature of taxpayers is

the existence of an independent source of income. As

regards the subjects of taxation, with regard to the

problem under consideration, it should be emphasized

that the subjects - payers of taxes, are difficult to

identify for various reasons (Igonin, 2020).

The object of taxation arises as a result of legal

factors (actions, events, states) that determine the

obligation of the subject to pay tax: making a turnover

for the sale of goods, works and services, importing

goods into the territory of Russia, owning property,

making transactions for the purchase and sale of

securities, entering into inheritance rights, receiving

income in one form or another, etc.

The legislation establishes a list of objects of

taxation: profit (income), the value of certain goods,

the value added of products, works, services, property

of legal entities and individuals, transfer of property

(donation, inheritance), transactions with securities,

certain types of activities, other objects established

legislation.

Since the object and subject of taxation are in

close relationship, the above problems in individual

territories exacerbate the solution of the problem of

improving methodological approaches in the

formation of a revenue base due to incomplete

accounting of the number of taxpayers and their

assets - property and intangible. In view of the

foregoing, it should be remembered that the subject

of taxation is characterized by signs of an actual (not

legal) nature that justify the collection of the

corresponding tax (

Fateeva, 2018).

The taxation base is a quantitative expression of

the subject of taxation, and taking into account the

fact that, for example, there is no single complete

national and even regional registers for land, the

taxable base is lost. In some cases, the taxable base is

Elements of the Tax System and the Mechanism of Their Interaction

115

actually part of the subject of taxation to which the

tax rate is applied (Silvestrova).

The source of taxation is used to pay the tax. The

source of taxation differs from the object of taxation.

The source of tax payments should be only net

income (profit) or capital of the taxpayer.

The above elements of the tax are characteristic

for each of its types separately. An analysis of the

elements of the tax system shows that the elements

characteristic of each individual type of tax have

different relationships, the degree of overlap with

another type of tax. So, for example, earlier we

argued that the object and subject of taxation are in

close relationship (

Shirov, 2021).

However, it should be remembered that the nature

of this relationship is very different and this implies

the construction of a tax system according to different

principles, namely:

- the principle when the subject of taxation

determines the object of taxation;

- the principle of territorial belonging of taxes,

where the object determines the subject of

taxation.

The implementation of the first principle assumes

that the state also extends its tax right to all incomes

of persons who have a permanent residence in a

particular country, and to incomes received abroad of

this state concept "resident" includes in Russia the

concept of a legal entity and an individual.

The criteria for "residency" in various countries

are very significant. In our state, it involves the

registration of a legal or natural person. In other

countries, the criteria for residence are considered to

be the established minimum volume of services or

goods produced, the location of the company's

management bodies, and others.

This principle is implemented in economically

developed countries, where the main business is

located in the country, and not abroad. For countries

with a large proportion of foreign investment, the

application of the principle of territoriality is typical.

Many countries, including Russia, apply a

combination of the above principles when building a

taxation system. An analysis of the elements of the

tax shows that the element, in turn, consists of

separate parts, let's call them conditionally

"microelements". Such a structure, or rather the

disunity of the element into components, is not

characteristic of all elements of the tax.

The absence of microelements in individual

elements of taxes predetermined the differentiation of

rates (increased, reduced, standard), that is, their

types. And this allowed the “types of rates” element

to be attributed not to taxes, where the “tax rate”

element appears, but to the tax system, where various

types of rates (differentiated) operate (Buyanova,

2021).

It should be noted that the elements of the tax

system are due to functional relationships that

determine the varying degree of tightness between the

elements. Thus, the element "object of taxation" is

very closely linked to another element "taxable base".

If they match, the first one refers to the tax element,

and if they do not match, the “taxable base” is an

element of the tax system. Accordingly, the question

arises, in what cases does a mismatch occur and what

is the cause of the mismatch? In our opinion, the

"loss" of individual trace elements from the element

leads to a mismatch of the latter (Dombrovsky, 2019).

So, for income tax, the element “object of

taxation” coincides with the element “taxable base” if

the legal entity does not have any benefits. It should

be remembered that the unit of measure used to value

the size of the above elements must be the same,

ensuring the comparability of the two compared

elements.

The tax consequences are associated with the

payer with two elements: the subject and object of

taxation. Analysis of the state of the element "subject

of taxation" shows the difficulty in distinguishing

between the two elements of the tax considered in the

tax system (Vlasov, 2019).

The concepts of these elements are very different

in relation to individual taxes. The biggest difference

is seen in relation to property tax and income tax. The

property of a specific individual (in the local budget)

or legal entity may, for example, be the subject of

several taxes, where an element is represented by the

subject of taxation.

With a common element (subject of taxation),

certain types of taxes have different objects of

taxation. This relationship shows the complexity in

determining the scale of the tax, the difference in

methods for determining taxable bases. At the same

time, which is especially difficult and important, the

tax, taking into account the various "objects of

taxation and the taxable base", tax amounts are

withdrawn to various budgets (

Khamzina, 2018).

Even more difficult is the combination of the

above elements (subject and object) in the taxation of

personal income. This circumstance is complicated

by the specifics of the settlements of individuals in

Russia. So, for example, with a single subject of

taxation, the objects are very different (Kalashnikova,

2019).

An analysis of the elements of the taxation system

shows that they include elements of taxes, tax systems

and legal facts that determine the implementation of

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such an element of tax as “the procedure and terms of

payment”. For example, the presence of material

assets (goods) in a legal entity does not cause the

obligation to pay VAT, and the purchase and sale

made in accordance with the legislation of the

Russian Federation contributes to the emergence of

the “object of taxation” element, i.e. the presence of a

fact from which the obligation to pay tax follows

(payment procedure) (

Sugarova, 2018).

Elements of the tax system are formed from the

structures of its components, i.e. elements of tax, tax

system and taxation system. The structure of the main

elements of the tax system shows the presence of

elements corresponding to different categories of the

tax system, one might say, levels. It gives us an idea

not only about the number of elements corresponding

to the tax "chain" (Gurova, 2018).

Ultimately, all elements from the first link to the

last are concentrated in the system. Insufficient

interaction gives rise to a "repulsion" of the elements

of the tax system, leads to a malfunction, a violation

of the harmonious interaction of all mechanisms of

the tax system.

The interaction of elements of the tax system is

included in the concept of "tax mechanism". The

general theoretical consideration of this content

reflects the area of tax theory in which the action of

the elements of the tax mechanism is delimited by a

number of subsystems. These subsystems reflect:

reproductive function, regulatory, control (Markin ,

2020).

It is quite obvious that the imbalance of the

elements of the tax system manifested itself in the

imperfection of the acts and measures taken by the

state in the field of taxes. One of the biggest

manifestations of this imbalance was the duplication

in taxation with the withdrawal of taxes, that is, their

doubling.

3 CONCLUSIONS

Thus, the main task of economic reforms in Russia is

the reform of the fiscal system. Inefficient budgetary

policy contributes to the growth of subsidized

budgets, the dispersion of funds among numerous and

poorly controlled extrabudgetary funds.

Fiscal policy should be based on the

implementation of an effective budget mechanism

that ensures conceptual unity in the development of

budgets of the constituent entities of the Federation, a

combination of interests at all levels of the budget

system, and the improvement of methodological

principles for constructing criteria for assessing

budget relationships.

Taxes, which are an important instrument of the

state's budgetary policy, are called upon to serve the

strategic goals of budgetary reforms. The creation of

a flexible tax and budgetary mechanism presupposes

an optimal delimitation of the powers of the federal

and regional authorities, a constant composition of

taxes at all levels of the tax system. The specificity of

the development of economic relations in Russia

determines the assignment of taxes to the levels of

government with their subsequent redistribution.

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