Capital and tax policy: Quo Vadis?

Abstract

Attention is drawn to the imperfection of the tax policy regarding the taxation of the profits of enterprises, due to the fact that it adheres to outdated dogmas, supposedly the only financial result of the efficiency of economic activity is profit. It is emphasized that despite the transition to market relations and the radical revolution of ideology, including the one related to tax policy, in particular, the elimination of the absurd ideological statements introduced into the accounting methodology of the beginning of the construction of socialism, such as the alleged profit and loss accounts, are characteristic only of a capitalist enterprise, and a socialist economy in its the nomenclature of accounts will have neither these nor the long-dominant capital accounts, the category has now taken its place of honor. At the same time, it is noted that the profit indicators are far from reality due to the bias of its determination due to the lack of a balanced calculation methodology and cases of falsification for the purpose of tax reduction. Which leads to overloading of fiscal bodies with routine procedures of scrupulous checks of the cost of products sold, works performed or services provided, which are not always crowned with success. The importance of replacing tax policy guidelines and transition from income taxation to its use as a capital base is substantiated. To eliminate the current unreliability of the amount of capital in the Balance Sheet (Statement of Financial Status) f. No. 1 according to methodologically unsubstantiated prescriptions of NP(S)BO 1 "General requirements for financial reporting". Because according to them, the current method of determining the capital as a part of the company's assets, which remains after deducting its liabilities, leads to even negative values, regardless of the inviolability of the registered (equity) capital in this reporting form. With the use of empirical data, the typicality of such nonsense is emphasized, when capital is often separated from the value of assets that it represents in general, or even completely passes into the virtual plane due to chronic unprofitability of enterprises. On the basis of an analytical understanding of the essence of the category of profit and capital, it is proposed to revise the tax policy and the methodology for determining a reasonable basis for determining the tax, which will ensure objective taxation of enterprises, taking into account the reality of indicators that will ensure compliance with its classical principles.