The article studies the organizational basis of state tax administration used by state tax authorities on the principle of system approach. The system of state tax administration, functioning as an important component of scientific, practical and methodological research, is one of the main elements of management theory and practice in general. The challenges of improving the efficiency of the Russian tax system regarding the interrelation and interdependence of the territorial tax potential and the level of the tax burden on the economic sectors acquire particular urgency in the light of defining the directions of the Russian tax policy. The paper describes the essence of the organizational function and its role in tax administration. The purpose of the organizational function, in addition to creating an appropriate structure, is to ensure the effective work of public authorities. The authors identified the problems of organizing the system of state tax administration and justified accordingly the directions for improving its quality. Difficulties in organizing the system of the state tax administration result from the conservative nature of this activity field in certain directions. Some government agencies, especially at the sub-federal level, often build their work on authoritarian methods that ignore new trends and prevent the creation of progressive administration structures that contribute to the efficiency of economic market realities. The organizational function of state administration in the tax sphere should not focus on building a benchmark practice of tax administration.
The challenges of improving the efficiency of the Russian tax system regarding the interrelation and interdependence of the territorial tax potential and the level of the tax burden on the economic sectors acquire particular urgency in the light of defining the directions of the Russian tax policy (Sinitsyna & Polinskaya, 2016). Creation, development and functioning of the tax system is a complicated process, which satisfactory development requires a clear definition of its criteria, implementation mechanisms and goal setting.
The current objectives of tax exemptions in the budgets of different levels reflect, as a rule, the need to form their income. Withdrawal of a part of the realized income in the form of payment to the budget is performed in the scheduled manner and reflect its necessary expediency within the limits of the state of the profitable source, created by the level of economic development. Nevertheless, it is too early to call the emerging development of the Russian economy as optimal.
Unjustified economic withdrawal of a part of realized income to the budget may be a measure contrary to rational taxation logic, regardless of its justification for budgetary reasons. As opposed to such, in our opinion, current unjustified tax withdrawals of income to the budgets, the global practice, including Russian, has developed and is using, firstly, methods to improve the general tax system, secondly, a differentiated approach to the establishment of tax rates, and thirdly, many forms of taxes themselves, if there is a reasonable finding of an independent basic source under each of them.
There is no perfectly fair tax system. Considering taxes as a weighty tool for solving social and economic problems, striving for unattainable perfection, which fully respects all individual characteristics of taxpayers, neutralized conflicts and contradictions of the system of tax relations, observes the principles of taxation adhering to the formulated criteria, it is possible to ensure elementary justice that promotes growth and development of the economy and society (Grigorieva, 2015).
At present, there is very imperfect integral system of economic planning and forecasting, which ensures the implementation of scientific and technical, financial and economic and social policy of the state. Insufficient quality of tax forecasting and planning, implementation of only certain principles of organizing the development, coordination and approval of plans and forecasts of tax revenues, both at the state and regional levels, have a negative impact on the tax administration system.
The system of state tax administration, functioning as an important component of scientific, practical and methodological research, is one of the main elements of management theory and practice in general. The base for the organization of tax administration consists of fundamental knowledge of political, economic, legal and other sciences based on modern domestic and foreign practice. The indicated organizational aspect depends on the totality of methods, ways and means, used by the state bodies (including tax), thus launching the tax mechanism in the direction set by the law and coordinating the measures of tax nature.
On the whole, we can consider the content of administration as a continuous process revealed in its functions which may be defined by the activities through which a subject of administration affects a certain controlled object. Creation of a certain structure is one of the characteristics of the organization process. In our opinion, the organization as a function of tax administration is the process of creating a structure for government bodies to ensure the effective receipt of tax funds, as well as the convenience of their payment by taxpayers. Elgood (2012) gives a similar interpretation and understands this function as a process of creating a structure of authorities at the state and regional levels, which should ensure decision-making on tax planning, as well as promote the convenience of payment by taxpayers.
The process of institutional evolution of the authorities has shaped the modern structure of these bodies. A prior condition for the creation of a structure is the formation of a strategy. The strategy should clearly identify goals, objectives and means of achieving them. Methods, in turn, should include two aspects: defining the system of necessary actions and determining the structure (composition) of organizational units of administration subjects.
Purpose of the Study
The purpose of the organizational function, in addition to creating an appropriate structure, is to ensure the effective work of public authorities. That is, the essence of the organizational element of state tax administration is not only the creation but also the effective functioning of bodies - participants in the state tax administration.
On the other hand, the organizational function of state tax administration needs to manifest in the development of tax administration. Many problems can arise here resulting from incorrect planning and approval of tax projections as part of budget revenues.
The research involved the following methods: analytical and comparative methods, method of comparison, methods of scientific classifications, etc.
Difficulties in organizing the system of the state tax administration result from the conservative nature of this activity field in certain directions. Some government agencies, especially at the sub-federal level, often build their work on authoritarian methods that ignore new trends and prevent the creation of progressive administration structures that contribute to the efficiency of economic market realities.
Adjustments to the provisions of laws should reflect their economic feasibility and not the results of practical activities. Tax decisions need to go beyond the current needs to finance the revenue side of the budget.
The system of tax regulation should transform accordingly to changes in government administration in general, as well as in social and economic processes. It is necessary to improve the system of tax benefits of a strategic nature, affecting the production of new competitive products, small businesses, scientific and technological processes (Basnukaev et al., 2019a).
As the practice and historical experience of the world's leading countries prove, state protectionism through taxes is a decisive factor in economic progress. These factors have a significant impact on the efficiency of the organization of state tax administration, and this process needs to improve in the conditions of economic transformation. The system of taxation is not a task of a certain set of taxes forever. It is essential to consider that the goals embodied in taxation can and should change all the rules of tax practice.
Thus, it will consider its unity, rationality and efficiency. There is a need for a flexible tax system that contributes to the qualitative improvement of the taxation system. The lack of systematic approach will inevitably result in the insufficiency of the established legal basis of taxation, lack of comprehensive approach to the tasks being implemented and, as a result, in the growth of tax problems. We believe that all the components of the tax system are not defined by the single establishment of legislative norms: this has to work out for real and that is the complexity of the multidimensional nature of the action. We should not forget that in the conditions of developed market relations, the set of taxes and the level of income taxation, their collection become really influencing the formation of the entire system of distributive relations in the economy.
It is unacceptable to equate the organizational and control functions of state tax administration. In our opinion, the significant difference between these concepts is that the control function is implemented mainly by tax authorities, while the organizational function concerns all levels and types of authorities (in terms of decisions regarding taxes).
For example, the arbitration practice of tax dispute resolution demonstrates the involvement of the judiciary, although indirectly, in state management of tax issues. The executive branch also has a link with the tax management, as the latter implements the budget in terms of tax collection.
Thus, the organizational function should play an important role in both the tax administration and the development of the whole country. Only this function of tax administration is closest to the distribution and regulation function of taxes, designed to carry out the value distribution of the product produced by the society and to influence various aspects of taxpayers' activities. This effect should focus on improving the socio-economic situation of taxpayers.
Of course, the Federal Tax Service plays the main role in the organization of tax administration. A further strategy for the development of tax authorities should provide for greater opportunities for staff development and reduced differentiation of responsibilities.
An important factor in improving the efficient organization of tax collection in Russia and the control of tax evasion is the close cooperation between employees of controlling bodies, members of the tax department. The achievement of the mentioned requires systematic mutual information about the situation of ensuring the requirements of the tax legislation and the circumstances that contribute to their violation; the formation of a data bank on the violators of the tax legislation and the circumstances that contribute to their violation; the coordination of plans for the general organizational, administrative and practical measures to verify the economic activities of taxpayers; analytical assessment of the provision of the tax legislation and the development of measures for the development of the tax legislation; the development of a database on the violation of the tax legislation and the circumstances that contribute to their violation.
The practical result of the organizational function of state tax administration should include maintenance of the stable structure of tax authorities; development of the scheme of quick (operational) connections between the subdivisions of tax authorities and state authorities; ensuring maximum awareness of taxpayers; recruitment of qualified staff following the directions of control; formation of efficient staff through further development of information and communication system; formation of the staff of the controlling bodies' subdivisions in accordance with the scale of control over the taxpayers' financial and economic activities.
The organizational solutions are inextricably linked to the concept of the country's general development. The quality of the organization of state tax administration should improve through: reduction of working hours and improving the quality of tax administration in the conditions of digitalization (Goncharenko et al., 2019).
One of the main tasks is to reduce time spent on tax audits by improving procedures for pre-check analysis of taxpayers; to delegate authority to the tax service divisions according to the level of responsibility. The audit divisions should receive more authority.
It assumes further transformation of the tax system, ensuring internal harmonization of all parts of the system and adaptation to changes in the external environment. Consistency of the links should provide for further development of partnership between taxpayers and tax authorities, as well as improvement of tax legislation concerning ambiguous interpretations to reduce the number of disputes over the harmonization of tax obligations between taxpayers and controlling authorities; development of a structure of authorities that would best meet the strategy of economic development of the state (Basnukaev et al., 2019b).
The organizational function of state administration in the tax sphere should not focus on building a benchmark practice of tax administration. Implementation of administration requires a system constantly on the move for improvement, and therefore considers:
- positive and negative structural changes in the country's economy;
- changes in the development of the world economy and globalization of international relations;
- geopolitical deformations;
- progress in science and technology;
- intellectual development of the individual.
Only the inclusion of as many internal and external factors as possible allows us to talk about organizing effective economic, institutional and administrative management. Thereafter, it will possible to improve the implementation of such functional elements of tax administration as tax planning and forecasting, tax control.
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Basnukaev, M. S., Pozmogov, A. I., Tuskayeva, M. R., Bataev, I. T., & Nunaev, M. B. R. (2019b). Positions of formation and regulation methods of corporate income tax. The Europ. Proc. of Soc. & Behavioural Sci. EpSBS, 57, 186–192.
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Goncharenko, L. I., Ermakova, E. A., & Tyurina, Y. G. (2019). Digital technologies of tax administration. Monograph with the stamp of the research Institute of education and science. YUNITI – DANA.
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17 May 2021
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Basnukayev, M. S., Sugarova, I. V., & Elzhurkaev, I. Y. (2021). State Tax Administration: Organizational Function And Its Role. In D. K. Bataev, S. A. Gapurov, A. D. Osmaev, V. K. Akaev, L. M. Idigova, M. R. Ovhadov, A. R. Salgiriev, & M. M. Betilmerzaeva (Eds.), Knowledge, Man and Civilization - ISCKMC 2020, vol 107. European Proceedings of Social and Behavioural Sciences (pp. 1919-1924). European Publisher. https://doi.org/10.15405/epsbs.2021.05.253