Fiscal Response of SMEs: Methodology for Assessment and Practical Application (Case Study of Perm Krai)

The fiscal response of SMEs is a key indicator for evaluating the effectiveness of government support and assessing its impact on a region's economic development. Defined as the ratio between the volume of budget investments in the SME sector and the resulting tax revenues, this metric allows for an assessment of the direct efficiency of public expenditures. Importantly, it quantifies how many rubles of tax revenue are generated per ruble of budget investment. Analysis of fiscal response helps identify the relationship between financial support volumes and growth in tax revenues, facilitating more informed allocation of budget resources and optimization of government support measures. The study employs comparative analysis and synthesis of existing approaches to evaluating SME support effectiveness, develops a coefficient for assessing expenditure efficiency, and conducts empirical analysis through collection and examination of budgetary and tax reporting data to evaluate the structure of government support and its impact on fiscal response. A comparative analysis method is also used to match support volumes with tax revenues. The research proposes a quantitative metric—the "SME Fiscal Response Coefficient"—as a tool for evaluating support effectiveness, with calculations based on data from Perm Krai for the period 2019–2024. Evaluating fiscal response requires a comprehensive approach that considers multiple factors influencing SME tax revenues, including expenditures on SME support programs and initiatives, tax expenditures resulting from incentives, and costs associated with maintaining support infrastructure. The study uses tax revenues from SMEs as the primary outcome measure of government support effectiveness. Investigating fiscal response not only assesses the efficiency of existing support measures but also identifies potential improvements, optimizes the structure of government assistance, and develops more effective mechanisms to stimulate SME development. These efforts contribute to increased tax revenues and sustainable economic growth in the region. The methodology and findings provide policymakers with actionable insights for refining SME support programs and maximizing their economic impact.

fiscal response, SME, government support, expenditure efficiency, tax revenues, Perm Krai, budget expenditures, regional economy, performance evaluation, tax incentives