The dynamics of tax revenues and the economic cycle in the Russian Federation

This paper aims to estimate the cyclical behavior of tax revenues of the Russian Federation budget system. Such estimates are necessary to analyze its ability to effectively smooth the economic cycle and to ensure the stability of public expenditures financing. We identified the cyclical component of the main types of taxes with the help of the Hodrick—Prescott filter. Cyclical components of tax revenues were used to calculate correlations with the cyclical component of GDP. The results show that the cyclical component of tax revenues includes corporate income tax, value-added tax on goods imported, and oil and gas revenues. The structural part includes personal income tax, value-added tax on goods sold in the Russian Federation, and excise taxes. According to the VAR modeling, taxes of the cyclical part of budget revenues cannot be characterized as automatic stabilizers.