The role of the tax on professional income in ensuring employment and legalizing the labor activity of the population

The change in the Russian labor market structure in the modern conditions affect to a large extent the new employment forms and types formation processes, that enhances the need to increase the informal activities and self-employment transparency. Finding and developing adequate tools for reducing informal employment and legalizing labor relations problems are coming to the fore. The article is focused on promising tax regulation instruments, in particular, development of the tax on professional income in the Russian Federation, its role in stimulating entrepreneurial activity and involving self-employed people in legal business. The present state of the self-employed taxation system in the Russian Federation has been analyzed. On the basis of the study it was found that: 1) the new tax regime implementation in practice reduces the shadow economy growth; 2) despite the extending of the tax to professional income and the growing number of the self-employed, the tax revenues are at the level of no more than 0.23 per cent of the total state tax revenues; 3) the revenues share from the simplified taxation system decreases when the tax is extended to professional income; 4) the structure of the tax system is projected to change in relation to decrease in the tax revenues due to reduction of the tax rate for professional income tax, increase in the share of individual labor activity and decline in the role of small enterprises. In general, the prospects for the professional income tax development in the Russian Federation can be described as favorable. Based on the study results, the directions for improving the professional income tax in order to increase its efficiency and expand the taxable base are proposed.

professional income tax, legal labor, self-employment, entrepreneurial activity, population