Inequality of Arctic Regions. Part II: The Redistributive Role of Tax Administration

This study examines how tax administration and subsequent revenue redistribution influence interregional disparities within the Russian Arctic. It demonstrates that the Arctic territories function as a significant contributor to the national budget, with a substantial share of locally collected taxes transferred to the federal level.

While existing tax rules and revenue‑sharing mechanisms mitigate disparities between different Arctic regions within a single fiscal year, they do not produce a sustained reduction of inequality over the medium and long term.

The research continues PORA’s analytical series on inequality among Arctic regions and builds on the assessment of state regional policy instruments. It addresses the need to evaluate whether the current system of tax administration and intergovernmental redistribution performs an equalizing function for Arctic regions and fosters conditions for the accelerated development of lagging territories.

The analysis is based on open data on tax revenues and their allocation within the budgetary system of the Russian Federation for the period 2013–2023. The study compares indicators at different stages of the budget process to assess how tax administration and redistribution mechanisms affect the scale of interregional inequality in the Arctic Zone. Results are presented through aggregated indicators and comparative charts illustrating changes before and after redistribution.

A key limitation of the study is the use of aggregated regional data, which prevents the isolation of tax flows generated specifically within Arctic territories or regions that are only partially within the Arctic Zone.