THE IMPACT OF INCREASING VAT RATES ON THE CONSUMER PRICES (ON THE EXAMPLE OF KALININGRAD REGION) IN 2019

One of the last significant changes in the tax legislation was the VAT increase in 2018. The tax that has not been altered much for almost 15 years. The article discusses the impact of increasing the VAT on consumer prices in the Kaliningrad region, as well as on inflation. At the moment the consequences of raising the VAT is the actual theme for modern Russian researches, however there is a lack of statistic data of process’ research at the regional level. The main idea of the study is learning how the VAT increasing affected on consumer prices, and its influence on the cost of a consumer basket in the Kaliningrad Region. This study was carried out using the construction of paired regression models, which made it possible to track the dependence of the analyzed factors. The constructed one-factor models and the conducted regression analysis showed a correlation between the level of increase in the VAT rate and the increase in inflation, as well as the increase in the cost of a minimum food consumer basket in the Kaliningrad region. The study covered 2018-2019, i.e. the period of manifestation of the main results of changes in the VAT tax rate. Based on the obtained model, we can conclude that, on average, with an increase in the VAT rate of 1%, the inflation rate increases by 0.92%.With a 95% probability, a statistically significant direct and close relationship was found between the increase in the cost minimum food consumer basket and the increase in the VAT rate in the period 2018—2019.

VAT, value added tax, one-factor regression, pair regression, Kaliningrad region, consumer prices, inflation, taxes, value added tax, regression analysis.

Tishchuk M. O., Shchepkova I. V., Sharkova A. A., Kryazheva D. A. The impact of increasing VAT rates on the consumer prices (on the example of Kaliningrad region) in 2019. Business. Education. Law, 2020, no. 1, pp. 280–285. DOI: 10.25683/VOLBI.2020.50.168.