The Russian Flat Tax Reform

By Alexander Klemm, Michael Keen, Anna Ivanova. Social Science Research Network, 2005

173 citations recorded by the source corpus.

type="main" xml:lang="en"> In 2001, Russia dramatically reduced its higher rates of personal income tax (PIT), establishing a single marginal rate at the low level of 13%. In the following year, real revenue from the PIT increased by about 26%. This ‘flat tax’ experience has attracted much attention (and emulation), making it perhaps the most important tax reform of recent years. But it has been little studied. This paper asks whether the strong performance of PIT revenue was itself a consequence of this reform, using both macro evidence and, in particular, micro level data on the experiences of individuals and households affected by the reform to varying degrees. It concludes that there is no evidence of a strong supply side effect of the reform. Compliance, however, does appear to have improved quite substantially – by about one third, according to our estimates – though it remains unclear whether this was due to the parametric tax reform or to accompanying changes in enforcement. — Anna Ivanova, Michael Keen and Alexander Klemm

Subfields: Accounting, Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/91fc5cb079c5adecddae694fcdacc60021f50011

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In Accounting

1. P. Imam
2. James Alm
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4. Zareh Asatryan

In Economics and Econometrics

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2. James Alm
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Citations in the corpus

• Effect of Corruption on Tax Revenues in the Middle East (2007, background): “In the event of being caught, if the fine depends on the amount of income concealed or the amount of tax concealed, the reduction in tax rates may lead to an increase or decrease in the degree of compliance (see Ivanova et al., 2005 for a literature review).”
• The 'Flat Tax(Es)': Principles and Evidence (2006, unknown): “43 See Chua (2003) and Gale and Gaddy (2005) 32 This is not, however, necessarily the case.”
• Tax Policy in Developing Countries: Looking Back—and Forward (2008, unknown): “Ivanova, Keen and Klemm (2005), for example, fi nd no evidence of a supply–side effect from Russia’s rate reduction and adoption of a fl at rate income tax, but Martinez–Vazquez, Rider and Wallace (2008) do fi nd evidence of a labor supply effect.16 As Lindert (2003) shows in historical context, the”
• Evaluating the Economic Effects of Flat Tax Reforms Using Synthetic Control Methods (2016, background): “An exception is Russia, where Ivanova, Keen, and Klemm (2005) and Gorodnichenko, Martinez-Vazquez, and Peter (2009) provide rigorous analyses of its flat tax reform.”