Impact of External Shocks on Tax Revenue Stress in Russian Regions

The subject of study is resilience of the tax revenues of the Russian regions. The aim of the study is to identify the impact of external shocks (sanctions, the COVID-19 pandemic, and fluctuations in oil prices) on tax revenue stress in the federal districts and subjects of the Russian Federation. For this, the following were developed: the tax revenue stress index, which is the difference between the moving standard deviation and moving rate of growth of annual tax revenues, and the methodology of its decomposition by source. Based on this index, estimates of tax revenue stress in Russian regions from January 2013 to July 2023 were obtained for the prepandemic, pandemic, and postpandemic (new sanctions) periods. It was found that tax revenue stress correlates significantly positively with oil price stress with a lag of 2–7 months, but the response of regions to oil market conditions is different. According to the estimates obtained, the average tax revenue stress in the considered period was higher in the Far Eastern, Ural, and Siberian federal districts, and in the first two districts, it was also characterized by the greatest variability. The lowest average tax revenue stress levels were observed in the Southern, Northwestern, and Central federal districts; in the latter district, it also showed the greatest stability. Decomposition of tax revenue stress in the country showed that during periods of external shocks, the Urals Federal District made the greatest contribution to the growth of all-Russian stress, and the Central Federal District was the main stress damper. During a period of relative stability, the Ural Federal District takes on the role of a stress damper. The COVID-19 shock had a significant impact on the tax revenues of most regions, although in 27 out of 85 federal subjects, the average stress decreased, while in 36 regions, its maximum value decreased. In the postpandemic period, tax revenue stress in 66 of the 85 regions was lower than in the previous two periods. However, the capital cities and a number of other regions have already felt the impact of the new sanctions of 2022. Stress behaves abnormally in the Far Eastern border regions and Murmansk oblast, associated with the specific factors of resilience of their regional economies and the peculiarities of specialization. The results can be useful for interregional comparisons and managing tax revenue stress in Russian regions.