THE ROLE AND VALUE OF SALARY TAXES AND INSURANCE CONTRIBUTIONS IN THE BUDGET REVENUES AND PENSION FUND OF THE RUSSIAN FEDERATION (THE SOCIAL FUND)

The taxes paid by citizens are highly valuable in social and economic aspect, as the state generates budget revenues at various levels and regulates the citizens’ incomes to balance the income differrence between various groups of the population using taxation. Taxes from an individual’s revenues and insurance contributions, which are not considered taxes, are differentiated as “salary” taxes and fees. In addition, the first ones are paid from the salary (revenue) of an employee, while insurance contributions are added to an employee’s salary. Since 2001, following the adoption of Chapter 23 “Tax on the individuals’ income” of the Tax Code of the Russian Federation, a schedule form of income tax came in force: an appropriate tax rate applies to various types of income, and a flat scale of taxation with tax deductions is used for wages. Since January 1, 2010, a single social tax has been replaced with insurance premiums, which are assessed at a higher rate than that of the single social tax (using regression for pension insurance contributions). The study aims to analyze the dynamics of the population’s monetary incomes, the tax role on an individual’s income in the revenues of the consolidated budgets of the subjects of the Russian Federation, and the insurance contributions in the Pension Fund income (the Social Fund of Russia since 2023). It is determined that flat scale taxation has led to a weakening of the regulatory and incentive-based function of the tax and a sharp differentiation of the population by income level. The replacement of the single social tax with insurance contributions did not solve the problem of pension provision, low wages result in low pension payments. The article substantiates the need for introducing an effective progressive scale in order to calculate taxes on the income of individuals, and to revise the regressive scale in the assessment of insurance contributions.