PFM Articles 
Post-crisis Fiscal Revenue Developments in Russia: From an Oil Perspective
GOOHOON KWON
PFM, Vol. 3 No. 4,
(2003)
This paper examines the level and trend of fiscal revenues in Russia in the
post-crisis period, focusing on the oil sector’s contribution to higher tax revenues
and the role of tax reforms. We estimate that about 80 percent of the total postcrisis
gains (about 5 percentage points of GDP) in the revenue of the general
government came from the oil sector. Although effects of tax reforms and oil prices
are difficult to disentangle empirically, our detailed tax-by-tax study indicates that
high oil prices accounted for most of the revenue gains; tax reforms played a
secondary role by making the tax regime more elastic to oil prices. This
assessment is corroborated by our cross-country comparison, which shows that the
Russian revenue performance in the post-crisis period does not differ from other
oil exporting countries. Similarly, our counterfactual analysis illustrates that lower
oil prices are likely to cause far more revenue losses to Russia than they did in the
pre-crisis period. These findings challenge the notion that the post-crisis revenue
gains are largely irreversible due to successful tax reforms, political stability, and
economic growth, and highlight the need for measures to help shield the budget
against oil price volatility. [JEL: E62, H20, P27, Q43]
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