FOREIGN EXPERIENCE IN THE
INDIVIDUALS TAX CONTROL
S.V. Salmina
Kazan Federal University, Institute of Management, Economics and Finance,
Kazan, Russia
A.M. Tufetulov
Kazan Federal University, Institute of Management, Economics and Finance,
Kazan, Russia
V.I. Nasyrova
Kazan Federal University, Institute of Management, Economics and Finance,
Kazan, Russia
A.R. Khazova
Kazan Federal University, Institute of Management, Economics and Finance,
Kazan, Russia
E-mail: svetasv21@yandex.ru
Recepción: 05/08/2019 Aceptación: 18/09/2019 Publicación: 23/10/2019
Citación sugerida:
Salmina, S.V., Tufetulov, A.M., Nasyrova, V.I. y Khazova, A.R. (2019). Foreign experience
in the individuals tax control. 3C TIC. Cuadernos de desarrollo aplicados a las TIC. Edición
Especial, Octubre 2019, 286-299. doi: https://doi.org/10.17993/3ctic.2019.83-2.286-299
Suggested citation:
Salmina, S.V., Tufetulov, A.M., Nasyrova, V.I. & Khazova, A.R. (2019). Foreign experience
in the individuals tax control. 3C TIC. Cuadernos de desarrollo aplicados a las TIC. Special
Issue, October 2019, 286-299. doi: https://doi.org/10.17993/3ctic.2019.83-2.286-299
3C TIC. Cuadernos de desarrollo aplicados a las TIC. ISSN: 2254-6529
288
ABSTRACT
The exercise of control over the collection of taxes is one of the key links ensuring
the replenishment of the treasury of the budget of any state. Therefore, a huge role
is played by the tax authorities of the country. It is thanks to them that reliable and
timely collection of taxes is carried out, the functions assigned to the tax system
are implemented. Tax control is aimed at all subjects of the economy: both legal
entities and individuals. Tax control is carried out in order to identify tax oenses,
as well as ensuring the inevitability of bringing to justice for tax oenses. In order
to implement these goals within the framework of tax control, it is necessary to
ensure that checks are made for the correctness of the calculation and payment
of taxes, the prevention of tax violations and the provision of compensation for
damage caused to the state as a result of non-fulllment by taxpayers of their
duties. In this study, the authors consider the comparative characteristics of the
tax systems of foreign countries and the Russian Federation. The analysis of the
performance of on-site tax audits of individuals for 2014-2018 has been carried
out. The authors concluded that some foreign trends in tax control could be
relevant in Russia. After all, the constant development of forms and methods, as
well as the very basis of tax control - the tax base, allows us to constantly improve
the entire tax system in Russia, increase tax revenues and reduce the taxpayers’
debt.
KEYWORDS
Tax, Taxation, Individuals, Tax Control, Foreign Experience.
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1. INTRODUCTION
Tax control over individuals always needs constant improvement, increasing
productivity, maintaining nancial stability and keeping up with time. Due to
the fact that taxes and fees are a signicant source of the revenue part of the
state budget, it is tax control that acts as a priority for tax authorities. Therefore,
the introduction of international developments can meet these requirements
and introduce innovations and peculiarities to the tax control authorities of the
Russian Federation. Consider the tax control of several countries, such as Japan,
Germany and the United States. The choice of compared countries is due, rst of
all, to the diversity of their location. In addition, the tax system of each country is
distinguished not only by its uniqueness, but also by its eciency.
2. METHODOLOGY
In conducting the study, the methods of comparison and generalization, methods
of statistical analysis and methods of analogy for determining risks were used.
3. RESULTS AND DISCUSSION
Speaking of Japan, it should be said that this is one of the most highly developed
countries in the world in the eld of economics and technology. One of the features
of the tax system of Japan is that in this country the highest proportion of income
taxes is compared with developed countries (Mityurnikova & Revyakina, 2013,
p. 30). It is also worth noting that the most signicant income to the state comes
from the income tax on individuals and legal entities, which in total exceeds 56%
of all tax revenues. For individuals in Japan, there is a progressive income tax
scale, the tax rates for personal income are in the range from 10% to 50%.
A detailed comparison of the main characteristics of the tax system of Japan and
Russia, as well as the administrative authorities of these countries, is reected in
Table 1.
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Table 1. Comparative characteristics of the tax systems of Russia and Japan.
Indicators Russia Japan
Tax rate Three level system Three level system
Ratios of direct and
indirect taxes,%
45/55 60/40
Personal income tax% 13 10, 20, 30, 37
The revenue part of the
country’s budget, %
90 tax / 10 non-tax 85 tax / 15 non-tax
Progressive taxation - Progressive system
Tax management Ministry of Finance Ministry of Finance
The Central Authority of the
state tax system
The Federal Tax Service
Central Ofce - National Tax
Administration
Source: (Yegorov, 2017, p. 62).
In addition to the similar characteristics of the tax systems of the compared
countries, various should be noted. These include the discrepancy in the
organization of tax control expressed in various forms of responsibility (Solovyova
& Shevchenko, 2013, p. 49). Thus, in Russia, responsibility for violation of
legislation on taxes and fees by individuals is divided into tax, administrative and
criminal, provided in accordance with the Tax Code, the Code on Administrative
Oenses and the Criminal Code. Whereas in Japan there is only tax and criminal
liability provided for by acts of criminal administrative legislation.
Comparing the elements of the implementation of tax control over individuals
in Russia and Japan, we can conclude that the Japanese tax system is more
centralized, the administration is more rigid and limited by law. However, this
does not at all indicate that the Federal Tax Service of Russia is not regulated
by the norms of the law. The Russian tax authorities are more able to rely on
an individual approach to each taxpayer, and therefore a greater likelihood of
eective action. A comparison of the tax control systems of Japan and Russia also
suggests that the state system is based primarily on the mentality of the country.
If you compare the tax system of Russia and the United States of America,
you can also nd many similar and excellent features. An interesting fact in this
case is that the degree of compliance with the law in the United States is one of
the highest in the world, the population pays about 83% of all taxes voluntarily
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and in accordance with the relevant provisions of the law (Gerb, 2015, p. 103).
This demonstrates the good quality of the system of informing taxpayers about
tax legislation and, at the same time, about sanctions that may follow in case of
illegal behavior. In addition, such an indicator of taxpayers may indicate the
peculiarities of the mentality of the country. Based on this consideration of the
features of control in the United States will be important for comparison and
analysis. The main provisions and aspects of the tax system are reected in Table
2.
Table 2. Comparative characteristics of the tax systems of Russia and the United States.
Indicators Russia USA
Tax rate Three level system Three level system
Personal income tax% 13 0, 10, 15, 25, 28, 33, 35, 39.6
Progressive taxation - Progressive system
Tax management Ministry of Finance Ministry of Finance
The Central Authority of the
state tax system
The Federal Tax Service The Internal Revenue Service
The Central Authority of the state tax system in the United States at the federal
level is the Internal Revenue Service (SVD), which is controlled by the Ministry
of Finance. At the state level, state tax services act as a similar body. In addition,
at the federal level under the SVD, the General Directorate for Tax Investigations
operates, dealing with tax investigations and carrying out operational-search
measures against unfair taxpayers.
Comparing the activities of the tax authorities of the United States and Russia,
one can notice the fact that in these countries the interaction with taxpayers is
actively developing. Interestingly, in the States, such assistance includes counseling
through call centers, direct contact, the use of booklets with instructions for lling
out declarations. In addition, there is a helpline in the USA that any resident
can call and express concerns, suspicions, or reliable evidence of tax legislation
(Morozov, 2009, p. 69). This indicates a high level of interaction between
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taxpayers and tax authorities. Mutual assistance can be one of the key reasons
why the level of voluntariness in paying taxes among US citizens far exceeds that
in other countries.
The next country in question is Germany. Here, the tax control is entrusted to
the tax police of the country “Steufa”. The most signicant type of income in
Germany, as in many other countries, are taxes. In this regard, special attention
is paid to tax control. Consider the main provisions on the administration of tax
policy, as well as the features of taxation in Germany, as reected in Table 3.
Table 3. Comparative characteristics of the tax systems of Russia and Germany.
Indicators Russia Germany
Tax rate Three level system Three level system
Personal income tax% 13 0, 14, 42, 45
Progressive taxation - Progressive system
Tax management Ministry of Finance
German Federal Ministry of
Finance
The Central Authority of the
state tax system
The Federal Tax Service Tax Police “Steufa”
In Germany, the level of tax collection reaches 90%, and tax evasion is an
extremely unusual phenomenon for the Germans. Perhaps this is due to
heightened legal awareness of citizens, and possibly the fact that tax crimes are
included in the list of those who are criminally prosecuted by the tax police.
In addition, in Germany there is a detailed and detailed legislation in the eld
of tax control. This leads to a reduction in misunderstanding, and accordingly,
disputes between tax authorities and taxpayers. In addition to the above factors,
it should be noted that it is an important fact that the banking system, the use of
new technologies in tax services, the exchange of information between various
services and government agencies - all this is at a suciently high and developed
level.
Thus, comparing the tax control systems in Germany and Russia, it can be
concluded that a number of features of the German system are repeated in
the Russian one. In addition, they do not dier much from the characteristics
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considered as a result of the analysis of the previous three countries. Of course,
in each country there are certain features that can be introduced into the tax
control system of our country to further increase eciency. However, one should
consider the mentality of our country and the fact that not all the features can
be taken from us. It is also worth noting that the tax control of most countries
has similar features due to globalization and the emergence of new international
projects, according to which member states should have a similar system of
taxation and control. Therefore, the foreign experience of organizing tax control
is relevant only in some specic areas of such control, and only considering the
features of our own tax system.
Currently, foreign countries exercise tax control over individuals, combining
three important aspects presented in Figure 1.
Figure 1. Principles on which tax control for individuals in foreign countries is based.
Thus, in many foreign countries with a stable tax system, since the end of the
last century, tax authorities have been reformed. Many developed countries are
modernizing their relations with taxpayers: in addition to the traditional “stick”
(enforcing tax laws through various sanctions), the “carrot” has become widely
used, that is, providing the taxpayer with the necessary services. As a service,
tax advice, taxpayer training on how to prepare tax reports, the provision of
other information and the provision of other assistance are oered. As the tax
authorities of foreign countries implement the principle of caring for the taxpayer
in the process of tax control over individuals, is presented in Table 4.
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Table 4. The implementation of the principle of care for the taxpayer in some foreign countries
Characteristic USA Sweden Finland
Assist taxpayers
in completing
declarations
Each of the tax forms in the United
States contains detailed instructions
for lling it out. More than 100
types of free brochures containing
information on various issues
related to tax declaration are issued
annually. One of these brochures
contains a complete catalog of free
services provided by tax authorities.
Instructions for completing
declarations can also be obtained
via an automated telephone system
or by calling a local telephone
number. In many libraries there are
videos with instructions for lling out
tax forms.
Such a practice is widespread as
the independent preparation of tax
declarations for taxpayers, who then
receive this declaration through secure
channels of communication and can either
accept it or make their own changes and
additions. In the rst case, it is enough for
them to conrm this declaration using an
electronic signature mechanism; in the
second case, they need to get in touch with
the tax service and provide the necessary
documentary evidence to substantiate the
proposed amendments and changes.
As can be seen from Table 4, foreign countries are currently building a system
of such tax control, in which there is rationalization and simplication of tax
procedures. And this is done both to simplify the work and optimize the working
time of tax authorities, and to simplify and facilitate taxpayers. Therefore, a
simplied approach to the collection and processing of tax reports is becoming
more and more common in foreign countries. In this regard, in Sweden and
Finland the tax authorities independently ll in declarations for individuals, and
in the USA the tax authorities provide a wide range of tax services aimed at
voluntary fulllment of tax obligations. At the border of concern for the taxpayer
and the imperativeness of tax control is the trust between taxpayers-individuals
and tax authorities in foreign countries. This principle of trust is reected in
the existence of the institution of the scal rescript and the development of
automated information systems of tax authorities, which is clearly reected in
Table 5.
Table 5. The implementation of the principle of trust in the implementation of tax control over
individuals in foreign countries.
Rescripcion Fiscal
France
The taxpayer has the right to send a request about the legality of the proposed
operation and to receive tax advice. The decision is mandatory for both the tax
authorities and the taxpayer and is not subject to change.
USA
The tax authority gives a written response to the taxpayer who made a
preliminary request for the transaction, which he intends to conclude.
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Rescripcion Fiscal
Sweden
The tax law commission issues a preliminary opinion on the tax consequences
of a transaction. Preliminary detention is mandatory for tax authorities and is
applied provided that the taxpayer wishes this.
Israel
The taxpayer can ask for advice before the conclusion of the transaction, during
and after its completion, and the main condition is to le a request for a tax
decision before the deadline for the annual declaration.
Germany
The rescript procedure is limited to advising taxpayers on payroll tax, customs
duties, or assessing actual situations in connection with scal control. Published
positions expressed by the tax administration become mandatory for it, but do
not impose restrictions on the court.
Automated information systems and technologies
USA
To facilitate contact with taxpayers, a special computer program called Tele-File
has been introduced, which allows you to receive data from them by phone.
According to these data, within 10 minutes the program calculates the amount of
taxable income of a particular taxpayer and the amount of income tax due from
it.
Australia
All organizations of the country are registered through the website by electronic
contactless method within one day. Now the country is switching to the mode of
registering individual taxpayers online.
Source: (Elkina, 2014, p. 141).
Table 5 shows how a very interesting system of the institution of preliminary tax
control and regulation is implemented in practice in some countries. Its meaning
consists in the taxpayer agreeing with the tax authority the tax consequences of
transactions before they are made. It is worth noting that, especially in Europe
and the USA, the institute of preliminary tax regulation (it is also called the scal
rescript) is a common form of tax control. The scal rescript is implemented
in the course of signing tax agreements or receiving individual consultations
(Solovyova & Shevchenko, 2013, p. 66).
Speaking about the tax control system of individuals abroad, it is necessary to
note the active use by the tax services of information technologies in interaction
with taxpayers-individuals, which is also reected in Tables 1, 2, 4 and which also
builds on the principle of trust between the tax authority and the taxpayer. The
overwhelming number of tax services in developed countries has specialized data
processing centers (tax returns and tax payments). In data processing centers, the
main work takes place with tax declarations of taxpayers-individuals at the primary
tax control stage: when accepting declarations, processing them, comparing the
information contained in them with other available data and directly transferring
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the results to the territorial tax authorities for subsequent control. Also, in many
countries, certain services are provided by the tax authority for citizens to le tax
returns electronically, pay taxes online and be able to track their tax obligations
to the budget.
However, despite the growing tendency of trusting relationships with taxpayers
and the development of a system of care for taxpayers, foreign tax authorities do
not forget about the imperativeness of tax control.
4. SUMMARY
To begin, consider the activity on the performance of tax audits conducted in
Russia, as disclosed in Table 4.
Table 4. The effectiveness of on-site tax audits in Russia.
01.01.2015 01.01.2016 01.01.2017 01.01.2018 01.01.2019
Total number of
on-site tax audits of
individuals
6299 4470 3449 2600 1614
Revealed violations 6236 4399 3394 2441 1571
The share of
inspections in which
violations were
revealed to the total
number
98,99% 98,41% 98,41% 93,88% 97,34%
It is worth noting that the overall level of detection of oenses in Russia at the
stage of on-site inspections is quite large. Comparing ve reporting years, it can
be concluded that the total number of inspections in Russia is decreasing. Thus,
every year the implementation of the principles of tax law and the Concept of
planning of eld tax audits is demonstrated in the best way. Based on the fact that
the number of checks is reduced, several conclusions can be drawn. This suggests
that the election of taxpayers’ subject to inspections is increasing.
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Secondly, a decrease in the quantitative composition also accompanies a positive
qualitative change in the eld checks. Reducing the range of attention of the tax
authorities, the legislation places greater emphasis on the dangerous in terms of
tax oenses of economic entities (Salmina et al., 2015).
At the same time, the eectiveness of tax audits is sometimes reduced or
decreased. However, the range of values within which the value of the detected
oenses diers is small: only 0.9%. If we analyze the last reporting year, then in
2018 the total number of individuals on-site tax audits was 1 614, of which 1 571
violations were detected. The eciency is 97.34%, and this is a high percentage,
given the heterogeneity of our regions and the dierent level of development of
the economy and control authorities.
Thus, we can conclude that some foreign trends in tax control could be relevant
in Russia. After all, the constant development of forms and methods, as well as
the very basis of tax control - the tax base, allows us to constantly improve the
entire tax system in Russia, increase tax revenues and reduce the taxpayers’ debt
(Balabanova Yuliya et al., 2018). Therefore, completing the consideration of the
main directions for improving tax control in Russia, as a result of applying the
experience of foreign countries, you can make the following suggestions:
a) Increasing attention to improving various methods of tax control, including
its initial stage - tax accounting. Reforming can occur through the
introduction of a single mandatory identication number for tax purposes,
which makes it less dependent on government accounting authorities
(Sabitova & Khazova, 2015; Artemenko et al., 2017).
b) Strengthening work on indirect methods of tax accounting. So, one of them
may be control over the expenses of individuals, which will help to identify
tax evasion.
c) Increasing the methods of working with taxpayers in order to increase the
tax literacy of the population. The use of forms designed for dierent age
groups and segments of the population.
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The work is performed according to the Russian Government Program of
Competitive Growth of Kazan Federal University.
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