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Russian Federation - Fiscal Reform Project (1998-1999)

 

Russian Federation - Fiscal Reform Project

Client:

-

Funding Source:

USAID

Type of Grant:

Research

Period Funded:

1998 - 1999

Location:

Moscow, Russia

Amount:

$180,000

Project Summary

Project Publications

Project Team

 

Project Summary:

During 1998-99, the International Studies Program (ISP) at the Andrew Young School of Policy Studies (AYSPS) was contracted by USAID to provide technical assistance in a variety of fiscal policy areas to the government of the Russian Federation. The two-year contract funded $10.4 million in technical assistance work and training in the Russian Federation. Georgia State University led a consortium that also included PriceWaterhouseCoopers, NERA Consulting Economists, the International Tax Investment Center (ITIC), the Center for Real Estate Analysis (CREA), and Indiana University. Our technical assistance philosophy successfully promoted the integral involvement of the Russian counterparts in the project's technical assistance efforts. From the Project's Moscow office, the Project provided technical assistance in five broad fiscal policy areas:

  • Tax Policy and Legislation
  • Tax Administration
  • Intergovernmental Fiscal Relations
  • Economic Analysis & Revenue Forecasting
  • Property Taxation

    • Tax Policy and Legislation
    Dr. Luc Noiset

    The objective of the work in tax policy was to support the development of the Tax Code and other tax legislation by analyzing options, commenting on alternative policies, and providing assistance in drafting legislation. Technical assistance was offered to all of the stakeholders in the tax reform debate, including the Ministry of Finance, the State Duma, and Federation Council. The acceptance of the Project's advisors by these groups and the close working relationship with all of them speaks to the positive contribution of the Project. For example, Project advisors regularly took part in meetings of working groups of the Subcommittee on Taxes of the State Duma. The Project made a large number of comments on the general part of the Tax Code which was passed by the Duma in 1998; several amendments were incorporated into the final version, while many other issues raised by the Project were addressed by subsequent amendments made in 1999.

    Tax Administration
    Mr. Allen Firestone

    The Project's tax administration technical assistance component aimed at supporting the goals the State Tax Service (STS) of the Russian Federation by providing assistance at both the federal offices of the STS and regional State Tax Inspectorates (STIs). This approach allowed the Project to offer planning, development and operational assistance on an organization-wide basis on issues such as modernization and centralization of processing, while developing a testing ground for some of the operational assistance through the STIs. This approach resulted in a significant number of outputs, including a review of the modernization efforts in two STIs; recommendations on a national modernization strategy; development of standardized tax forms for the VAT and personal income tax; development of a full arrears collection methodology; and the development of audit methods and implementation of these methods in two pilot STIs.

    Intergovernmental Fiscal Relations
    Dr. John Mikesell; Dr. Roy Bahl

    The intergovernmental fiscal relations component of the Project provided advice and technical assistance to the federal government as well as a number of regional governments. At the federal level, the Project functioned as the research arm of the policy makers at the Ministry of Finance, the President's Administration and the State Duma. Several important reforms in the area of intergovernmental relations have been attributed to the Project, including substantial improvements in the federal-regional equalization mechanism. The Project played a central role in developing a national strategy for reform of intergovernmental relations at the regional level. In addition, the Project worked with five pilot regions to develop intergovernmental fiscal strategies at the regional level that are more in step with a market-oriented economy.

    Economic Analysis & Revenue Forecasting
    Dr. Mitch Mokhtari

    The goal of the economic analysis component of the project was to develop high-quality, unbiased analysis and revenue estimates of fiscal policy options. Among others, the Project responded to requests for such analysis from the Ministry of Finance, the Ministry of Taxation, the State Duma and the Federation Council. Several Russian government agencies came to rely heavily on the analytical assistance provided by the Project.

    Property Taxation
    Ms. Natasha Kalinina

    The main goal of the property tax component was to support the ongoing efforts in the cities of Novgorod and Tver to introduce a property tax in 1999. While delays in the federal enabling legislation prevented introduction of the tax for 1999, the Project was successful in finalizing the information systems needed for the cities to go forward and introduce the tax as soon as the legislation was put in place in late 1999.

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    Project Publications:

     

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    Project Team:

     Roy Bahl - Tax Policy Expert

    Allen Firestone - Tax Policy Expert

    Natasha Kalinina - Tax Policy Expert

    John Mikesell - Tax Policy Expert

    Mitch Mokhtari - Tax Policy Expert

    Luc Noiset - Tax Policy Expert

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