Page 28 - Azerbaijan State University of Economics

Aynur Suleymanova: Assessment of Laffer Points of the I and II Types of VAT (on the
Example of Russian Federation, Kazakhstan and Azerbaijan Republics

Table 1. Comparison of the optimal level of the tax burden on VAT in Russian
Federation, Kazakhstan and Azerbaijan Republics.
The Republic of The Republic of
Russian Federation
Kazakhstan Azerbaijan

I type II type I type II type I type II type
Laffer point Laffer point Laffer point Laffer point Laffer point Laffer point

5.57 5.77 - 2.93 2.64 3.21
Source: This table was calculated by Author.
The results obtained fom this research are given below:
- The level of tax burden on VAT that maximizes the value of GDP in Russian
Federation equals 5.57 percent, and the tax burden that maximizes the value of VAT
revenues equals 5.77 percent. It should be noted that in 2017 in Russia, the level of
tax burden on VAT was 5.6 percent which was lower than both I and II type of the
Laffer points. Based on this, we can conclude that effective 2019, an increase in the
VAT rate from 18 percent to 20 percent in the Russian Federation will approximate
the level of the tax burden on VAT to the optimal level.

- It was impossible to determin the I type Laffer point for The Republic of
Kazakhstan, but the II type Laffer point was 2.93 percent.

For The Republic of Azerbaijan the I type Laffer point equals to 2.64 percent, and
the II type Laffer point equals to 3.21 percent.

5. CONCLUSION
When analyzing the tax burdens obtained as a result of the study as shown in Table
1, we see that the optimal tax burden on VAT for the Russian Federation derived
from the model exceeded the tax burden of 5.6 percent recorded in 2017. And the
optimal tax burden on VAT for the Republic of Kazakhstan derived from the model
is lower than the tax burden of 3.2 percent registered in 2017. Hence, we conclude
that to achieve the maximum level of VAT revenues in the Republic of Kazakhstan,
it would be reasonable to gradually reduce the tax burden to a level of 2.93 percent.
We also see that the Laffer points obtained as a result of the research for the
Republic of Azerbaijan are slightly different from each other, or rather, their
difference is 0.57 points. Also, in comparison with the tax burden registered in 2017,
the Laffer point of the first kind obtained as a result of the study is lower, and the
Laffer point of the second kind is higher. Analysis of the results obtained for the
Republic of Azerbaijan gives us the reason to say that to stimulate economic growth,
and at the same time to increase the ratio of VAT revenues to the budget, it is

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