Revenue also came from a variety of other sources. Indirect taxation formed an important part of the government revenues, even in the eighteenth century. The largest single source of indirect taxation was from liquor. Distilling was established as a monopoly of the nobility in 1754, and from 1767 revenue was collected through a system of tax farming in which a merchant obtained a concession to sell liquor and paid the government a fixed fee for the privilege; the Moscow and St Petersburg liquor farm for 1767-70 attracted a price of 2.1 million roubles annually. Revenue from the liquor trade made up an increasing proportion of the government's income during the eighteenth century: in 1724 only 11 per cent of the state's revenue came from liquor, but this jumped sharply, reaching a peak of 43 per cent of the total in 1780 and then falling back to 24 per cent in 1805.23 During the nineteenth century, liquor revenue averaged 31 per cent of total government revenue. By the middle of the century, the government had developed sufficient bureaucratic capability to consider abolishing the system of tax farming and taking on itself the administration of the liquor trade. This was a highly significant development, since the state was now able to monopolise tax collection and thus gain much greater control over its fiscal affairs, without needing to take the tax farmers into account. In
19 Kahan, The Plow, p. 333.
20 See, for example, Iu. G. Gagemeister's 1856 report, 'Ofinansakh Rossii', in L. E. Shepelev (ed.), Sud'by Rossii (St Petersburg: Liki Rossii, 1999), p. 14.
21 L. Bowman, 'Russia's First Income Taxes: The Effects of Modernized Taxes on Commerce and Industry 1885-1914', SR 52 (1993): 257.
22 N. I. Anan'ich, 'K istorii otmeny podushnoi podati v Rossii', IZ 94 (1974): 186-8.
23 J. P. LeDonne, 'Indirect Taxes in Catherine's Russia. II. The Liquor Monopoly', JfGO 24 (1976): 203. D. Christian, Living Water: Vodka andRussian Society on the Eve of Emancipation (Oxford: Clarendon Press, 1990), pp. 382-5.
1863, the tax farm was abolished. It not only signified the growing strength of the state's fiscal apparatus, but also resulted in an increase in the net revenue that the liquor trade brought in. Gross liquor revenues rose consistently after 1863, but the costs of collecting the new excise duties were consistently reduced. In the 1850s, some 18 per cent of gross liquor revenue was eaten up by the cost of collecting the taxation, but this was reduced to only 3 per cent by 1880. The risk that the state had taken in believing that its resources were strong enough to cope with this major change in its fiscal system proved to be justified. The introduction of a full government monopoly on the manufacture and sale of vodka brought significantly increased gross revenues to the treasury from liquor, reaching more than 950 million roubles in 1913, but this was offset by considerably higher costs, meaning that the net contribution to the state's budget from liquor remained steady after the 1894 reform.
In common with other states, the Russian government sought to raise revenue by taxing salt. Peter the Great introduced a state monopoly on salt in 1705 and the government took control of a vast enterprise to refine and distribute salt across the empire. This did not prove to be the same easy source of revenue as the liquor trade, since Russia's salt deposits were often located far away from the main centres of population and the costs involved in exploiting these resources proved to be very high. In 1762 the state spent one-third of its gross revenues from salt on production and distribution costs, leaving it with a net contribution to the budget of only 2.2 million roubles. Within twenty years, the net income had halved and, in 1791 the government made a loss on its salt operations for the first time.[75] In such a situation, the state had to act to protect its revenues. Even though the government raised the price of salt, this did not help in stabilising the situation and in 1818 the state gave up its monopoly on the sale of salt, eventually abolishing the salt tax completely in 1880.
The government also received income in its capacity as landowner from the peasants who lived on its land. In 1723 Peter the Great standardised the variety of labour service and other dues that were owed by state peasants and instead made them liable for cash payments (obrok) to the government. This produced a growing source of income and was one that the state believed it could exploit. During the eighteenth century, the rate of obrok payments increased by roughly twice the rate of inflation, although state peasants did pay significantly less than privately owned serfs. Discussions took place about further increases in the rate of obrok in the 1840s alongside Kiselev's overall reforms of the state peasantry. The government was wary of demanding large additional sums from the peasants, believing that this 'would disturb the tranquillity of the population and have dangerous consequences'.[76] While obrok did offer some advantages to the government as it sought to increase its revenues, the government also recognised that by publicising its move away from the poll tax, it would be publicly demonstrating its problems in making an accurate census of the population. Kiselev did reform the system of obrok, but this question again raised its head when the emancipation of the state peasants was implemented in 1866. The government was reluctant to lose its income from obrok and was wary of making radical changes that might threaten the security of its revenues. Instead of moving immediately to a system of redemption payments, as with privately owned serfs, the government reformed the system of obrok, calculating peasants' liability not just by the value of the land they held, but by taking into account their total income. It was only in 1886 that state peasants' obrok payments were finally converted into redemption payments. This move resulted in a significant increase in revenues: the average total revenue from obrok between 1880 and 1885 was 32 million roubles annually, whereas in the period 1887 to 1890, income averaged 43 million roubles. The famine years of 1891 and 1892 witnessed a reduction in revenue from state peasants' redemption payments, but they then increased again, reaching 55 million roubles in 1895.[77]
As the Russian government looked for ways to curb its expenditure, it also sought to increase its revenues. This process, however, proved of equal difficulty. The 1841 committee that had rejected a large increase in obrok also found good reasons to turn down most other suggested methods of increasing the government's income. It avoided detailed discussion of the poll tax, preferring to wait for the Ministry of Finance to make its own proposals, argued that the government was already seeking ways to enhance the efficiency of the salt industry and thus enhance income from that source, and finally rejected any wholesale reform of the liquor industry.[78] The committee took a highly defensive tone towards criticism of the government's record on enhancing its own revenues, finding reasons to reject every suggestion for improvement. By the 1860s, the government's financial position was more precarious and attempts to find ways of raising additional revenues met with a more positive response.
75
J. P. LeDonne, 'Indirect Taxes in Catherine's Russia. I. The Salt Code of 1781',
76
'Osoboi komitet dlia pazsmotreniiu predstavlennogo Ego Velichestvu ot neizvestnogo obzora finansovoi chasti v Rossii, 1841', RGIA, Fond 1175, op. 16, d. 1. 118.