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Studies in Systems, Decision and Control 182
Irina V. Gashenko
Yulia S. Zima
Armenak V. Davidyan Editors
Optimization of the
Taxation System:
Preconditions,
Tendencies, and
Perspectives
Studies in Systems, Decision and Control
Volume 182
Series editor
Janusz Kacprzyk, Polish Academy of Sciences, Warsaw, Poland
e-mail: kacprzyk@ibspan.waw.pl
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Irina V. Gashenko Yulia S. Zima
•
Armenak V. Davidyan
Editors
Optimization of the Taxation

System: Preconditions,
Tendencies, and Perspectives
123
Editors
Irina V. Gashenko Armenak V. Davidyan
Rostov State University of Economics Rostov State University of Economics
Rostov-on-Don, Russia Rostov-on-Don, Russia
Yulia S. Zima
Rostov State University of Economics
Rostov-on-Don, Russia
ISSN 2198-4182 ISSN 2198-4190 (electronic)

Studies in Systems, Decision and Control
ISBN 978-3-030-01513-8 ISBN 978-3-030-01514-5 (eBook)
https://doi.org/10.1007/978-3-030-01514-5
Library of Congress Control Number: 2018956270
© Springer Nature Switzerland AG 2019

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Contents
Part I Conceptual Foundations of Taxation

The Notion and the Essence of Taxes and Taxation. Functions
of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Irina V. Gashenko, Yuliya S. Zima and Armenak V. Davidyan
Tax System of a State: Federal, Regional and Local Taxes and Fees . . . 13
Classification of Taxes and Their Features . . . . . . . . . . . . . . . . . . . . . . . 23
Part II Theory and Practice of the Tax System Operation

Principles and Methods of Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Tax Administration and Control. Tax Policy of the State . . . . . . . . . . . 41
Standard and Special Tax Treatments. A Comparative Analysis . . . . . . 49
Tax Burden and Mitigation of Tax Payments . . . . . . . . . . . . . . . . . . . . 57
Part III Advanced Tools to Mitigate the Taxation System

Tax Holidays as an Upcoming Tool of Tax Incentive for Business
Renewal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Sergey V. Shkodinsky, Alexander E. Suglobov, Oleg G. Karpovich,
Olga V. Titova and Ekaterina A. Orlova
Taxation of Labor in Terms of Building a Social Market Economy . . . . 75
Z. V. Gornostaeva, I. V. Kushnareva and O. F. Sverchkova
v
vi Contents
Restructuring of Tax Liabilities as an Upcoming Trend of Economic

Diversification in Modern Russia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Natalya A. Shibaeva, Anna I. Zarudneva, Anastasia A. Sozinova,
Alexander V. Shuvaev and Alexander N. Alekseev
Effective Tax Policy of the State: Conceptual Foundations
and Methodology of Evaluation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
Aleksei V. Bogoviz, Tatyana A. Zhuravleva, Elena G. Popkova,
Anna I. Zarudneva and Marina L. Alpidovskaya
Part IV Optimization of Taxation at the Level of Separate

Economic Subjects
Management of Taxation at a Modern Company: Tax Optimization
Versus Tax Load . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
Aleksei V. Bogoviz, Svetlana V. Lobova, Julia V. Ragulina,
Alexander N. Alekseev and Elena I. Semenova
Personal Tax Management: Voluntary Initiative or Forced Measure . . . 109
Alexander E. Suglobov, Oleg G. Karpovich, Elena V. Kletskova,
Inna Y. Timofeeva and Tatiana S. Kolmykova
Tax Awareness and “Free Rider” Problem in Taxes . . . . . . . . . . . . . . . 117
Aleksei V. Bogoviz, Inna N. Rycova, Elena V. Kletskova,
Tatyana I. Rudakova and Marina V. Karp
Part V Optimization of Taxation in Modern Russia: The Current

State and Tendencies of Reformation
Means of Optimization of the Taxation System with the Help of
Informatization and the Problems of Their Application in Russia . . . . . 127
Ways and Methods of Simplification of the Taxation System with
the Help of Informatization for Supporting Small and Medium
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
Informatization as a Mechanism of Fighting Tax Evasion . . . . . . . . . . . 143
Chinara R. Kulueva, Pirmat K. Kupuev and Mirlanbek B. Ubaidullaev
Part VI Top-Priority Directions of Optimization of Taxation

in Modern Russia
The Model of Development and Implementation of Effective Tax
Policy in Modern Russia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153
Tatyana N. Litvinova
Contents vii
Tax Crisis and Crisis Management in the Taxation System

of Modern Russia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161
Tamara G. Stroiteleva, Siradzheddin N. Gamidullaev, Julia V. Kuzminikh,
Petr N. Afonin and Sergey P. Udovenko
Digitization of Taxes as a Top-Priority Direction of Optimizing
the Taxation System in Modern Russia . . . . . . . . . . . . . . . . . . . . . . . . . 169
Elena G. Popkova, Irina A. Zhuravleva, Sergey A. Abramov,
Olga V. Fetisova, Elena V. Popova and Ekaterina S. Kovanova
Part VII Optimization of Taxation in the Conditions of Information

Economy
The Concept of Tax Stimulation of Informatization of Modern
Entrepreneurship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179
Natalia V. Gorshkova, Leyla A. Mytareva, Ekaterina A. Shkarupa
and Rustam A. Yalmaev
The Mechanism of Tax Stimulation of Industry 4.0 in Modern
Russia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189
Ulyana A. Pozdnyakova, Aleksei V. Bogoviz, Svetlana V. Lobova,
Julia V. Ragulina and Elena V. Popova
Taxation of the Internet Enterprise as Key Subjects of Information
Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 199
Tatyana N. Aksenova, Kita K. Bolaev, Elena V. Samaeva
and Burgsta E. Evieva
The Model of Well-Balanced Taxation for Overcoming the Shadow
Economy in Modern Russia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207
Ulyana A. Pozdnyakova, Aleksei V. Bogoviz, Svetlana V. Lobova,
Julia V. Ragulina, Elena V. Popova and Olga V. Fetisova
The Strategy of Provision of Tax Security of the State
in the Conditions of Information Economy . . . . . . . . . . . . . . . . . . . . . . 217
Gilyan V. Fedotova, Ruslan H. Ilyasov, Anastasia A. Gontar
and Viktoria M. Ksenda
New Types of Taxes and Forms of Taxation in the Conditions
of Information Economy: Perspectives of Optimization . . . . . . . . . . . . . 229
Olga V. Titova, Elena I. Kostyukova, Natalia M. Boboshko
and Irina P. Drachena
Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 237
Introduction
Taxation system is one of the most important elements of the institutional envi-
ronment for conducting entrepreneurial activities in the economic system. Its
effectiveness determines the successfulness of the state budget and development of
business, which determines the importance and significance of the problem of
taxation optimization. The purpose of the book is to determine the perspectives and
to develop the system of measures for reforming the taxation system of modern
Russia for its optimization. It provides an authors’ opinion on the issue of tax
optimization in the context of development of small and medium entrepreneurship
and offer innovational mechanisms for fighting tax evasion.
Emphasis on small and medium business in the context of modern Russia is the
peculiarity of the book, which distinguishes it from other publications on this topic.
This issue was selected for research due to the fact that existing publications in the
sphere of taxation are usually devoted to studying general fiscal problems in a state,
while in the conditions of new economy, the role of small and medium business
grows, and peculiarities and perspectives of taxation optimization should be studied
by the modern scientific society.
Another peculiarity of the book, which ensures its topicality and attractiveness
for the wide audience is studying the process of optimization of the system of
taxation not in the isolated manner but in connection to the tendency of informa-
tization (digitization) of the modern economy. This ensures not only the uniqueness
of the approach to treatment of optimality of taxation system but also the originality
of the offered authors’ recommendations for achieving it in economic practice of
modern socioeconomic systems by the example of Russia.
The basic hypothesis, which became the initial point for conducting a complex
of scientific and practical research, presented in this book, consists in the idea that
the current informatization (digitization) opens new possibilities and perspectives
for optimization of the taxation system. The purpose of the book is to study the
actual tendencies and preconditions to optimize the taxation system of modern
Russia and to substantiate expedience and to develop practical recommendations
for using the possibilities of its informatization (digitization) in this process.
ix
x Introduction
The target audience of the book includes postgraduates, lecturers of higher

educational establishments, and researchers who study foundations of modern
macroeconomics. Based on the authors’ conclusions and results, representatives of
this target audience can build their current and future scientific studies. The book
has seven parts.
The first part is devoted to conceptual foundations of taxation, namely the notion
and essence of taxes and taxation, functions of taxes, structural analysis of state’s
taxation system, and classification of taxes and their characteristics.
The second part views the theory and practice of taxation system’s functioning:
principles and methods of taxation, essence of tax administration and control and
state’s tax policy, general and special taxation regimes, analysis of tax load, and
process of tax payments optimization.
In the third part, the authors determine the perspective tools of optimization of
taxation system: tax holidays are viewed as a perspective tool of tax stimulation of
modernization of entrepreneurship; peculiarities of labor taxation are studied in the
conditions of formation of social market economy; restructuring of tax obligations
is viewed as a perspective direction of diversification of modern Russia’s economy;
conceptual foundations are determined and methodology of evaluating the effec-
tiveness of state tax policy is given.
The fourth part is devoted to studying the optimization of taxation at the level of
separate economic subjects. The authors consider the issues of tax optimization and
tax load within the management of taxation at a modern company, analyze the
necessity for personal tax management, and study the tax consciousness and for-
mulate the “free rider problem” in taxes.
In the fifth part, the authors study the current state and tendencies of reformation
of the modern Russia’s taxation system: the methods of optimization of the taxation
system with the help of informatization and problem of their application in Russia
are studied; ways and methods of simplification of the taxation system with the help
of informatization for supporting small and medium business are offers; informa-
tization is viewed as a mechanism of tax evasion fighting.
The sixth part is devoted to substantiating top-priority directions of taxation
optimization in modern Russia. The authors offer a model of development and
implementation of effective taxation policy in modern Russia, study tax crisis and
crisis management in the system of taxation of modern Russia, and digitization of
taxes as a top-priority direction of optimization of the taxation system in modern
Russia.
In the seventh part, the authors’ recommendations for the optimization of tax-
ation in the conditions of information economy are given; the concept of tax
stimulation of modern entrepreneurship’s informatization is provided; the mecha-
nism of tax stimulation of Industry 4.0 in modern Russia is offered; peculiarities of
taxation of Internet companies as the key subjects of the information economy are
considered; the model of well-balanced taxation for overcoming the shadow
economy in modern Russia is offered; the strategy of provision of tax security of the
state in the conditions of information economy is offered.
Part I
Conceptual Foundations of Taxation
The Notion and the Essence of Taxes
and Taxation. Functions of Taxes
Abstract Purpose The purpose of the study is to investigate available interpreta-

tions of the notion and the essence of taxes and taxation and to represent the
comprehensive one, as well as to reveal the relation between competitiveness and
successful performance of the tax system. Methodology The methodology unit to
proof a hypothesis under suggestion is based on the methods of regression and
correlation analysis that allows making a model of pair linear regression and cal-
culating the correlation of the world tax systems competitiveness and values of their
successful performance. The study is conducted on the data of the end of 2017–the
beginning of 2018. To ensure the representativeness of the research outcomes, we
use the countries located in different regions of the world with different level and
rate of social and economic development as objects of the study. Results The
analysis showed that regression and correlation dependencies between successful
performance of the world tax systems and their competitiveness are low or mod-
erate. Consequently, the relation between them is very weak or absent. Therefore
scientifically, it’s more logical to define the competitiveness of the tax system not as
its target property, but as one of the present system functions; it is expedient to
consider their successful performance as the most important goal of this system. It
makes possible to overcome the opposition of competitiveness of the tax system
and its functions, and also give a fuller description. Therefore, we offer the fol-
lowing functions of the tax system: revenue, regulating, social, supervising, and the
one providing the competitiveness of this system. Recommendations It is recom-
mended to revise the methodological provisions and approaches to the theory of
taxes and taxation and to upgrade empirical ones within the terms of this theory due
to its clarified conceptual provisions.
I. V. Gashenko (&) Y. S. Zima A. V. Davidyan

Rostov Institute of National Economy,
Rostov State Economic University, Rostov-on-Don, Russian Federation
e-mail: gaforos@rambler.ru
Y. S. Zima
e-mail: zima.julia.sergeevna@gmail.com
A. V. Davidyan
e-mail: dav_121192@mail.ru
© Springer Nature Switzerland AG 2019 3

I. V. Gashenko et al. (eds.), Optimization of the Taxation System: Preconditions,
Tendencies, and Perspectives, Studies in Systems, Decision and Control 182,
https://doi.org/10.1007/978-3-030-01514-5_1
4 I. V. Gashenko et al.
Keywords Taxes Taxation Tax system Competitiveness Tax functions

JEL Classification E62 H20 K34
1 Introduction
Importance and relevance of taxes and taxation for modern economic systems is
practically assured and stressed by all scientists and experts in the area of economic
government administration. However, the complexity and versatility of taxes and
taxation brings an ambiguity in the interpretation of their notion and essence, which
presently need clarification in the frames of each scientific research depend on its
objectives.
Heterogeneity and incoherence, as well as inconsistency of available definitions
of concept and essence of taxes and taxation undermines scientific foundations for
studying this economic phenomenon (and process) and causes an issue to systemize
a knowledge accumulated in this area and to compose a clarified integral notion and
essence of taxes and taxation.
Due to globalization, by now taxes and taxation have become a way to provide a
global competitiveness of economic systems instead of the one to solve internal
macroeconomic tasks. In this regard, the world tax systems competitiveness is
ranked, for example, in accordance with the most established one, International Tax
Competitiveness Index, annually represented by Tax Foundation on the values of
corresponding index calculated by this international organization.
Performances that determine the tax systems competitiveness of are their
attractiveness for international investors (the lower tax rates and the higher stability
and predictability of tax policy, the more its attractiveness) and its neutrality (the
lesser omissions related to the application of tax benefits, the more neutrality). At
the same time, internal needs due to successful performance of functions imposed
on them, and the peculiarities of economic systems are not taken into account.
For this reason, in this study we put forward a hypothesis that the competi-
tiveness of the tax system does not guarantee a successful performance of functions
(and vice versa). The purpose of the study is to investigate available interpretations
of the notion and the essence of taxes and taxation and to represent the compre-
hensive one, as well as to reveal the relation between competitiveness and suc-
cessful performance of the tax system.
The Notion and the Essence of Taxes … 5
2 Materials and Method
As follows from the systematization of available scientific knowledge contained in

the latest expert studies on taxes and taxation, we build up the following
author-owned classification of fundamental approaches to reveal the essence and
functions of taxes and taxation (Table 1).
The methodology unit to proof a hypothesis under suggestion is based on the
methods of regression and correlation analysis that allows making a model of pair
linear regression and calculating the correlation of the world tax systems compet-
itiveness and values of their successful performance. The study is conducted on the
data of the end of 2017–the beginning of 2018. To ensure the representativeness of
the research outcomes, we use the countries located in different regions of the world
with different level and rate of social and economic development as objects of the
study.
3 Results
In accordance with Table 1, a revenue approach puts as a priority a revenue

function of taxes and taxation concerning assurance of the state budget revenues
(when admitting all other functions). The values of successful performance are a
budget balance and a country’s credit rating contained in the Global
Competitiveness Report of the World Economic Forum (Table 2 and Fig. 1).
As can be seen from Fig. 1, with increase in the tax system competitiveness of 1
point, the state budget balance of the countries under study is increased of 0.0192%
of the GDP, and the credit rating is reduced of 0.0723 points. Low values of
Table 1 Fundamental approaches to reveal the essence and functions of taxes and taxation
Approach Key function Essence of taxes Representatives of approach
of taxes and and taxation
taxation
Revenue Revenue A way to assure Aslanov (2015), Miller et al. (2016),
state budget Nerudová and Dvořáková (2014),
revenues Nerudová and Solilová (2017)
Regulatory Regulating A way to Musayev and Musayeva (2018), Popkova
administer an et al. (2018a, b), Shokeen et al. (2017),
economic activity Zhang et al. (2016)
Social Social A way to ensure a Dagan (2017), Dallyn (2017), Faizal et al.
social justice (2017), Hearson (2017)
Supervision Supervising Self-controlled Cui and Notteboom (2017), Spartà and
(tax) system Stabile (2017), Verma et al. (2017), Wu
and Lu (2018)
Source Compiled by the authors
Table 2 Original data to analyze the dependence of successful revenue performance of the tax
system and its competitiveness
Country The tax system State budget Country’s credit rating,
competitiveness, points from 0 balance, % of the points from 0 to 100
to 100 (position) (x) GDP (y) (max) (y)
Estonia 100.0 (1) 0.3 (12) 76.8 (24)
New 88.7 (2) 0.6 (9) 86.3 (15)
Zealand
Switzerland 85.2 (3) −12.4 (129) 20.0 (125)
Turkey 73.7 (11) −2.3 (54) 52.6 (68)
The United 70.8 (14) −3.1 (72) 88.9 (13)
Kingdom
Norway 70.7 (15) 2.9 (4) 94.8 (2)
Canada 69.1 (17) −1.9 (48) 92.3 (8)
Japan 66.8 (22) −4.2 (93) 82.0 (19)
Germany 66.6 (23) 0.8 (8) 94.7 (3)
Mexico 62.2 (25) −2.9 (70) 71.0 (34)
USA 55.1 (30) −4.4 (95) 93.4 (4)
Italy 47.7 (34) −2.4 (61) 68.4 (37)
France 43.4 (35) −3.3 (76) 84.0 (16)
Russia 34.42 (58) −3.7 (84) 54.2 (61)
Source Compiled by the authors based on: Tax Foundation (2018), World Economic Forum
(2018)
Fig. 1 Regression curves displaying the dependence of successful revenue performance of the tax
system on its competitiveness. Source Constructed by authors
correlation coefficients in both cases (0.92 and 0.37% respectively) evidence a

statistical insignificance of dependencies revealed.
The representatives of regulatory approach consider taxes and taxation as a way
to regulate an economic activity (a key function is regulating) through restraining
one activity and promoting another one (tax privileges) for increase of business
activity, which property is the Index of Economic Freedom composed by The
Heritage Foundation, and the growth of living standards of the population described
by a corresponding rating Legatum Institute (Table 3 and Fig. 2).
Table 3 Original data to analyze the dependence of successful regulating performance of the tax
Country The tax system Place in a global rating Index of Economic
competitiveness, points due to a living Freedom, points from 0
from 0 to 100 standard of the to 100 (max) (position)
(max) (position) (x) population (y) (y)
Estonia 100.0 (1) 27 78.8 (7)
New 88.7 (2) 2 84.2 (3)
Zealand
Switzerland 85.2 (3) 4 55.9 (123)
Turkey 73.7 (11) 88 65.4 (58)
The United 70.8 (14) 10 78.0 (8)
Kingdom
Norway 70.7 (15) 1 74.3 (23)
Canada 69.1 (17) 8 77.7 (9)
Japan 66.8 (22) 23 72.3 (30)
Germany 66.6 (23) 11 74.2 (25)
Mexico 62.2 (25) 61 64.8 (63)
USA 55.1 (30) 18 75.7 (18)
Italy 47.7 (34) 30 62.5 (79)
France 43.4 (35) 19 63.9 (71)
Russia 34.42 (58) 101 58.2 (107)
Source Compiled by the authors based on: Tax Foundation (2018), Legatum Institute (2018),
The Heritage Foundation (2018)
Fig. 2 Regression curves displaying the dependence of successful regulating performance of the
tax system on its competitiveness. Source Constructed by authors
point, the living standard of the population is reduced of 0.7459 items, and the
value of the economic freedom index is increased of 0.2433 points. Moderate
values of correlation coefficients in both cases (17.36 and 25.60% respectively)
evidence a statistical insignificance of dependencies revealed.
Within a social approach, taxes and taxation are perceived as a way to ensure a
social justice with focus on their social function (when admitting all other
Table 4 Original data to analyze the dependence of successful social performance of the tax
Country The tax system competitiveness, The European index of social justice,
points from 0 to 100 (position) (x) points from 0 to 10 (position) (y)
Estonia 100.0 (1) 6.19 (12)
The United 70.8 (14) 6.22 (11)
Kingdom
Germany 66.6 (23) 6.71 (7)
Italy 47.7 (34) 4.84 (25)
France 43.4 (35) 6.29 (10)
Denmark 67.0 (21) 7.39 (1)
Sweden 81.8 (6) 7.31 (2)
Finland 68.2 (19) 7.14 (3)
Poland 54.4 (31) 5.79 (15)
Portugal 51.9 (33) 5.36 (20)
Spain 59.8 (28) 4.96 (24)
Greece 57.2 (29) 3.70 (28)
Source Compiled by the authors based on: Tax Foundation (2018), Bartelsmann Stiftung (2018)
The level of social justice
6
y = 0.0317x + 3.9595
4 R² = 0.1959
0
0 20 40 60 80 100 120
The tax system competitiveness
Fig. 3 The regression curve displaying the dependence of successful social performance of the
tax system on its competitiveness. Source Compiled by the authors
functions). The performance of social justice is the social justice index composed
by Bartelsmann Stiftung for the European countries (Table 4 and Fig. 3).
point, the level of social justice is increased of 0.0317 points. The moderate value of
the correlation coefficient (19.59%) evidences a statistical insignificance of the
dependency revealed.
A supervision approach stresses an importance of a supervising function of taxes
and taxation (when admitting all other functions) defining them as a self-regulatory
(tax) system. It is believed that the more complex the tax system, the more difficult
to exercise its self-supervision. The performance of the tax system complexity is a
Table 5 Original data to analyze the dependence of successful supervising performance of the tax
Country The tax system complexity, points from The tax system competitiveness,
0 to 100 (position) (x) points from 0 to 100 (position) (y)
Estonia 48.70 (14) 100.0 (1)
New Zealand 34.50 (9) 88.7 (2)
Switzerland 28.80 (19) 85.2 (3)
Turkey 41.10 (88) 73.7 (11)
The United 30.70 (23) 70.8 (14)
Kingdom
Norway 37.50 (28) 70.7 (15)
Canada 20.90 (16) 69.1 (17)
Japan 47.40 (68) 66.8 (22)
Germany 48.90 (41) 66.6 (23)
Mexico 52.10 (115) 62.2 (25)
USA 43.80 (36) 55.1 (30)
Italy 48.0 (112) 47.7 (34)
France 62.20 (54) 43.4 (35)
Russia 47.50 (52) 34.42 (58)
Source Compiled by the authors based on: Tax Foundation (2018), World Bank Group,
PricewaterhouseCoopers (2018)
70
60
competitiveness
y = -0.2756x + 60.685
The tax system
50 R² = 0.2054
40
30
20
10
0
0 20 40 60 80 100 120
The tax system complexity
Fig. 4 Regression curves displaying the dependence of the tax system competitiveness on
successful supervising performance. Source Compiled by the authors
corresponding index calculated by the World Bank Group and Pricewater

houseCoopers (Table 5 and Fig. 4).
As can be seen from Fig. 4, with increase in the tax system complexity of 1
point, its competitiveness is reduced of 0.2756 points. The moderate value of the
correlation coefficient (20.54%) evidences a statistical insignificance of the
dependency revealed.
State Government budget Environment (world

economic system)
Revenue function
Supervising function competitiveness

Rest raining
Regulating
Promoting
function
(attractiveness for investors
ta abroad)
Self-supervision xe
s
Function to provide
Tax system competitiveness
Economic activity Redistribution of revenues to ensure a social

justice and level-off imbalances
Social function
Economic entities
Fig. 5 Complex modern concept of the essence and functions of taxes and taxation Source
Compiled by the authors
The analysis showed that regression and correlation dependencies between

successful performance of the world tax systems and their competitiveness are low
or moderate. Consequently, the relation between them is very weak or absent.
Therefore scientifically, it’s more logical to define the competitiveness of the tax
system not as its target property, but as one of the present system functions; it is
expedient to consider their successful performance as the most important goal of
this system.
It makes possible to overcome the opposition of competitiveness of the tax
system and its functions, and also give a fuller description. Accordingly, in this
paper we offer the following functions of the tax system: revenue, regulating, social,
supervising, and the one providing the competitiveness of this system, which is
displayed in Fig. 5.
Figure 5 exhibits integrity (unity and strong interrelation) of the functions of
taxes and taxation. Based on the concept suggested, the definition of taxes and
taxation in this paper is a way to regulate economic activities aimed at bringing it
into compliance with national priorities (performing a regulatory function), to
redistribute revenues for ensuring social justice and leveling-off imbalances (social
function), providing the state budget replenishment (revenue function) and global
competitiveness of the economic system (the function to provide competitiveness)
under condition of self-supervision (supervising function).
4 Conclusions
Thus, hypothesis under suggestion has been proofed: multiple tests of nature and
strength of relation between the tax systems competitiveness and their successful
performances on the statistical data by sampling of different countries of the world
have demonstrated the absence of their clear and sustainable dependency.

Systematization of scientific interpretations of the notion and the essence of taxes
and taxation allowed revealing four functions of taxes and taxation that are rec-
ognized by modern scientists: revenue, regulating, social and supervising.
It is also has been established that authors of today mostly prefer only one
function without taking into account others, which interferes the integral perception
of the tax system. Therefore, we have offered a comprehensive modern concept of
the essence of taxes and taxation enabling to combine all their functions and add a
new one—providing competitiveness. Clarification of conceptual provisions of the
theory of taxes and taxation needs revising the methodological provisions hereof
and upgrading approaches to empirical research herein.
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Tax System of a State: Federal, Regional
and Local Taxes and Fees
Abstract Purpose The purpose of the paper is studying the peculiarities to adjust
contradictions in the Russian tax system and drawing up a practical model to
organize tax system of the country and to implement a fiscal federalism in modern
Russia. Methodology The methodology for testing a hypothesis under suggestion
includes methods of economic statistics, namely, methods of structural and hori-
zontal analysis, as well as ones of comparative and plan-fact analysis and for-
malization (graphical representation of data). Information and analytical
background of the study is the official statistical data of the Federal Tax Service of
the Russian Federation, the Ministry of Finance of the Russian Federation, and the
Federal State Statistics Service of the Russian Federation (Rosstat) for 2008–2017.
Results We revealed deviations from preferable (target) peculiarities to adjust
contradictions in the tax system of modern Russia that lead to imbalance of local
fiscal subsystems, escalation of deficit in all level-budgets, as well as establishing
the dependence of territories on intergovernmental transfers. We have built a
practical model for organization of the tax system and for implementation of fiscal
federalism in the Russian Federation, which has not only advantages (such as
integrity, etc.), but also disadvantages (enhanced limitation of fiscal initiatives and
opportunities of territories, multiple overlapping of tax revenue flows, etc.).
Recommendations We advise an improvement of the tax system in modern Russia
through adjustment of revealed disadvantages.

Keywords Tax system of the country Federal Regional and local taxes and fees
Fiscal federalism
I. V. Gashenko (&) Y. S. Zima A. V. Davidyan

Rostov Institute of National Economy, Rostov State Economic University,
Rostov-on-Don, Russian Federation
e-mail: gaforos@rambler.ru
Y. S. Zima
e-mail: zima.julia.sergeevna@gmail.com
A. V. Davidyan
e-mail: dav_121192@mail.ru
© Springer Nature Switzerland AG 2019 13

I. V. Gashenko et al. (eds.), Optimization of the Taxation System: Preconditions,
Tendencies, and Perspectives, Studies in Systems, Decision and Control 182,
https://doi.org/10.1007/978-3-030-01514-5_2
JEL Classification E62 H20 K34
1 Introduction
Functions of taxes and taxation are performed through establishment, operation and
development of the tax system of the country. The fundamental principle of tax
systems in most modern countries of the world is a fiscal federalism, which
involves a simultaneous delimitation and strong interrelation of federal, regional
and local fiscal systems. Following this principle causes three inevitable contra-
dictions in the tax system:
– The collision of federal–national (more internationally-oriented) and territorial–
regional and local (more nationally-oriented) interests;
– The collision of interests in public performance (resulting in growth of expen-
ditures and a budget deficit) and in maintaining remunerativeness (with possible
surplus) of government budgets;
– The collision between national interests of balanced territorial development
(granting temporary federal support to the territories to activate their own
economic growth) and territorial interests to rely on federal support (establishing
dependence on federal support without following-up their own initiatives to
activate economic growth).
The peculiarities of adjusting these contradictions define specific nature of
practical models to organize the tax system of the country and to implement fiscal
federalism. The Concept of long-term social and economic development of the
Russian Federation until 2020 approved by the decree No. 1662-p. as of November
17, 2008 states the following preferred (target) peculiarities of adjusting these
contradictions (Government of the Russian Federation 2018a):
– prevailing of territorial interests (as evidenced by declared decentralization of
the fiscal system and its commitment to provide regional economy
development);
– prevailing of interests in public performance (as evidenced by declared
large-scale goals of social and economic development along with a refusal to
increase the total tax burden in economy);
– prevailing of national interests in balanced territorial development (as evidenced
by declared heightened commitment of the tax system to the issues of levelling
up income and enhancing spur impact of the tax system on economic
development).
Given that the above-noted concept was developed and adopted before the crisis
of the Russian economy in 2009, current hypothesis of this research consists in the
author’s suggestion that the preferred (target) peculiarities to adjust contradictions
of the tax system are not fully achieved (mispresented) in modern Russia due to
Tax System of a State … 15
crisis impact (among other). The purpose of the paper is studying the peculiarities to
adjust contradictions in the Russian tax system and drawing up a practical model to
organize tax system of the country and to implement a fiscal federalism in modern
Russia.
2 Materials and Method
A review of available studies and papers on the topic allowed identifying two basic
theoretical models of the state tax system organization and the implementation of
fiscal federalism—decentralized and centralized—upon which practical models of
countries are to be built.
A decentralized model is applied in countries such as the Great Britain, the USA,
Canada, Japan, etc. It involves a high degree of financial (fiscal) independence of
territories within the state, wide opportunities to introduce their own taxes, define
performances (for example, tax rates), and to make loans, as well as the lack of
activity in taking measures aimed at levelling-up imbalances in local budgets and
overcoming unremunerativeness. This model is studied in papers by authors such as
Del Bo (2018), Haddow (2018), Kimura (2017), Nicholson-Crotty et al. (2006), and
Xing (2018).
A centralized model is much more widespread and applied in countries such as
Germany, France, Mexico, China, etc. It is related to a low degree of financial
(fiscal) independence of territories within the state, their strictly limited opportu-
nities to introduce their own taxes and define performances (for example, tax rates),
and to implement loans, as well as activity in taking measures aimed at levelling-up
imbalances in local budgets and overcoming unremunerativeness. It is considered in
papers by scientists such as Grabova et al. (2018), Gunlicks (2012), Hoyt (2017),
and Sun et al. (2017).
Modern Russia follows a centralized theoretical model enshrined in the Tax Code
of the Russian Federation (TC RF) N 146-ФЗ as of July 31, 1998. Pursuant to it, the
tax system in modern Russia is a three-tiered one with the following categories and
corresponding taxes and fees (Government of the Russian Federation 2018b):
– Federal (macro-level category): value added tax, excise duties, personal income
tax, corporate income tax, mineral extraction tax, water tax, levies for the use of
fauna and aquatic, state duty;
– Regional (meso-level category): corporate property tax, gambling tax, transport
tax;
– Local (micro-level category): land tax, individual property tax, sales tax.
The Russian practice of organizing tax system and implementing fiscal feder-
alism is discussed in publications by experts such as Dyukina (2017), Gashenko
et al. (2018), Ibragimov et al. (2014), Popkova et al. (2018a, b), Shvetsov and
Balikoev (2017).
The methodology for testing a hypothesis under suggestion includes methods of

economic statistics, namely, methods of structural and horizontal analysis, as well
as ones of comparative and plan-fact analysis and formalization (graphical repre-
sentation of data). Information and analytical background of the study is the official
statistical data of the Federal Tax Service of the Russian Federation, the Ministry of
Finance of the Russian Federation, and the Federal State Statistics Service of the
Russian Federation (Rosstat) for 2008–2017.
3 Results
To reveal the peculiarities of ratio of federal–national (more internationally-

oriented) and territorial–regional and local (more nationally-oriented) interests in
modern Russia, let’s address the structure of consolidated budget in the Russian
Federation (Fig. 1).
20000.0
15000.0
8181.5
10000.0
5000.0 9162.0
0.0
Revenues of consolidated budgets of

territories (subjects of federation)
(47.17%)
Expenditures for implementation of national

interests (27.00%)
Expenditures of the federal budget for

implementation of domestic interests
(21.00%)
Expenditures of territorial budgets for
implementation of domesitc interests
(33.30%)
Other expenditures (18.70%)
Fig. 1 Structure of revenues and expenditures of the consolidated budget in the Russian
Federation in 2017, bln. rub. Source Compiled by the authors based on: Federal Tax Service of the
Russian Federation (2018), Ministry of Finance of the Russian Federation (2018), Rosstat (2018)
As can be seen from Fig. 1, in the revenue structure of the consolidated budget
of the Russian Federation (RUB 17,343.5 billion) proportions of the federal budget
(RUB 9162 billion, 52.83%) and consolidated budgets of territories (entities) (RUB
8181.5 billion, 41.17%) are distributed rather equally. In the structure of expen-
ditures, ones related to implementation of national interests are prevailing (RUB
4682.9 billion, 27%), including:
– Expenditures on national issues (RUB 648.6 billion);
– Expenditures on national defense (RUB 1591.5 billion);
– Expenditures on national security and law enforcement activity (RUB
1070.2 billion);
– Expenditures on national economy (RUB 1372.7 billion).
The proportion of federal budget expenditures on national interests’ imple-
mentation is 21% (RUB 3642.2 billion), including:
– Expenses for housing and public services (RUB 66.7 billion);
– Expenses for social and cultural activities (RUB 2935.5 billion);
– Expenses for education (RUB 343.2 billion);
– Expenses for healthcare (RUB 245.4 billion);
– Expenses for environmental protection (RUB 51.6 billion).
The proportion of local budget expenditures on national interests’ implementa-
tion is 33.30% (RUB 5775.3 billion), including:
– Expenses for housing and public services (RUB 770.9 billion);
– Expenses for social and cultural activities (RUB 5004.5 billion).
To reveal the peculiarities of ratio between interests in public performance and in
maintaining remunerativeness (with possible surplus) of government budgets in
modern Russia, let’s turn to the balance dynamics in consolidated budget of the
Russian Federation in 2008–2017 (Fig. 2).
3000
2000
1000
0
-1000
trend
-2000
-3000
-4000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Series1 2014.2 -2448.6 -1584.7 860.8 260.4 -848.7 -845.6 -2819.5 -3142.2 -3569.1
Fig. 2 Balance dynamics in consolidated budget of the Russian Federation in 2008–2017, RUB
billion. Source Compiled by the authors based on: Federal Tax Service of the Russian Federation
(2018), Rosstat (2018)
As can be seen from Fig. 2, the expenditures of the Russian Federation con-
solidated budget exceed revenues over almost all period under study, and the
balance of this budget is featured by negative dynamics and a downward trend,
which evidences an escalation of the budget deficit. In comparison with 2008, when
the budget surplus amounted to RUB 2014.2 billion, in 2017 there was a budget
deficit of RUB 3569.1 billion. This evidences the prevailing of interests in public
performance over the ones in maintaining budget remunerativeness.
To reveal the peculiarities of ratio of the national interests of balanced territorial
development (granting temporary federal support to the territories to activate their
own economic growth) and the territorial interests to rely on federal support
(establishing dependence on federal support without following-up their own ini-
tiatives to activate economic growth) in modern Russia, let’s turn to balance
dynamics in consolidated budgets of the Russian Federation territories (entities) in
2008–2017 (Fig. 3).
As can be seen from Fig. 3, over the entire period under study we observe a
negative balance in consolidated budgets of the Russian Federation territories
(entities). The highest gravity of their deficit had occurred in 2013 (641.5
RUB billion.). Despite the upward trend, in 2017 still there is a negative balance in
consolidated budgets of the Russian Federation territories (entities) in the amount of
RUB 24.5 billion. It points to the establishment of the dependence of modern
Russia territories on federal support and the prevailing of territorial interests.
Based on the results of our analysis, we built up the following practical model of
the tax system organization and the implementation of fiscal federalism in modern
Russia (Fig. 4).
As can be seen from Fig. 4, the practical model of the tax system organization
and the implementation of fiscal federalism has a complicated structure. In addition
to the advantages connected with its high degree of unification, strong interrelation
and interdependence of all-level fiscal system, and their mutual support for
achieving balance and remunerativeness, this model is featured by the following
disadvantages:
0
-100
-200
-300
-400
-500
-600 trend
-700
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Series1 -54.3 -329.1 -99.6 -34.9 -278.7 -641.5 -447.6 -171.6 -12.6 -24.5
Fig. 3 Balance dynamics in consolidated budgets of the Russian Federation territories (entities) in
2008–2017, RUB billion. Source Compiled by the authors based on: Federal Tax Service of the
Russian Federation (2018), Rosstat (2018)
Inter-government
Federal fiscal system National
transfers
Taxes (macroeconomic)
Levelling-up imbalances level
Regional fiscal subsystem Mesoeconomic

level
Imbalance (inequalities and
deficit) and dependence on
Taxes federal support Overcoming Local level
deficit
Levelling-up imbalances
Local fiscal subsystem Microeconomic

level
Fig. 4 Practical model of the tax system organization and the implementation of fiscal federalism
in Russia. Source Compiled by the authors
– incomplete achievement (distortion) of preferred (target) peculiarities to adjust

contradictions of the tax system and occurrence of stable unexpected ones
related to horizontal imbalances in local fiscal subsystems, deficit and depen-
dence on federal support;
– excessively limited opportunities of the territories in obtaining tax revenues
reduced to collection of property taxes, which causes their low (or zero) interest
in the development of entrepreneurship and increasing income of the population
due to impossible acquisition of revenue from profit tax and personal income tax
(since revenues from these taxes are directed to the federal budget);
– oversaturation with tax revenue flows, which are firstly collected in local bud-
gets, then directed to the federal budget and thereafter again are redistributed
between the territories.
4 Conclusion
Thus, hypothesis under suggestion is proofed and deviations from the preferable
(target) peculiarities to adjust contradictions of the tax system in modern Russia
leading to imbalance in local fiscal systems, escalation of budget deficit at all levels,
and establishing the dependence of territories on inter-government transfers are
revealed.
A practical model built by us to organize the tax system and to implement fiscal
federalism in the Russian Federation has not only advantages (such as integrity,
etc.), but also disadvantages (enhanced limitation of fiscal initiatives and
opportunities of territories, multiple overlapping of tax revenue flows, etc.) It evi-

dences the necessity and the availability of opportunities and prospects for
upgrading the tax system in modern Russia.
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than a horse's hair, whose presence in the hinder part of the mouth cavity produced
divers objectionable results, such as spitting of blood and hindered respiration.
Fam. 2. Herpobdellidae.—Pharynx without denticulate jaws, with three unarmed

chitinous plates.
A characteristic genus of this family is Trocheta, which is so common at the

Zoological Society's Gardens and in the Regent's Park, and which has been met
with in other places near London; it is in this country an introduced species, but is
found in many parts of the continent. It is a land-leech, and lives upon earthworms.
The genus Haemadipsa, which M. Blanchard places in a special sub-family,

contains a number of species which are for the most part land-leeches. Land-
leeches occur in many parts of the world, but chiefly in the tropics—in India, Ceylon,
Java, South America, etc. They lie in wait for their prey, upon the ground as a rule;
but they may ascend herbs and shrubs to gain a better outlook when they are aware
of an approaching footstep. A vivid account of the ferocity of these tiny Annelids in
Ceylon can be read in Sir J. E. Tennent's Natural History of Ceylon. They have been
said to be so pugnacious and so poisonous that persons surprised in their sleep by
the pests have succumbed to their united efforts. A whole battalion of English
soldiers decamped on one occasion from a wood which was overflowing with land-
leeches. The familiar misquotation "lethalis hirudo" might well be applied to this
species. Professor Whitman has written much upon the habits of the land-leech of
Japan (Haemadipsa japonica), which bites so softly that its presence cannot be
detected except for the stream of blood which trickles from the wound. While it is
feeding it emits from the pores of the nephridia a clear fluid, which, as it appears, is
used to keep the skin moist; when unduly dried the same phenomenon occurs. It is
curious that in this and other leeches the nephridia should play a part which in the
earthworm is played by the dorsal pores; in both animals the glands of the skin are
also concerned with the same duty.
The purely aquatic leeches swim by undulations, and also crawl by the help of the
two suckers, like a "Geometer" caterpillar. But when a land-leech is dropped into the
water it at once sinks to the bottom and crawls out; it does not swim, but can survive
immersion for a long period. In this it resembles the earthworms, which can also
survive a prolonged immersion, and even in the case of some are indifferent to the
medium, land or water, in which they live; the land-leech, however, is entirely
dependent upon damp surroundings; a dry air is fatal to it. The land-leech of Japan
leaves a slimy trail behind it as it crawls, in this respect recalling the land Planarian
Bipalium kewense.
GEPHYREA AND PHORONIS
BY
ARTHUR E. SHIPLEY, M.A.

Fellow and Tutor of Christ's College, Cambridge
CHAPTER XV
GEPHYREA
INTRODUCTION—ANATOMY—DEVELOPMENT—SIPUNCULOIDEA—PRIAPULOIDEA—
ECHIUROIDEA—EPITHETOSOMATOIDEA—AFFINITIES OF THE GROUP.
The animals included in the above-named group were formerly associated with the
Echinodermata. Delle Chiaje[468] states that Bohadsch of Prague in 1757 was the
first to give an accurate description of Sipunculus under the name of Syrinx, but
Linnaeus, who noted that in captivity the animal always kept its anus directed
upwards, re-named it Sipunculus. Lamarck[469] placed the Gephyrea near the
Holothurians; and Cuvier[470] also assigned them a position amongst the
Echinoderms. He mentions Bonellia, Thalassema, Echiurus, Sternaspis, and three
species of Sipunculus, one of which, S. edulis, "sert de nourriture aux Chinois qui
habitent Java, et qui vont la chercher dans le sable au moyen de petits bambous
préparés."
The name Gephyrea[471] was first used by Quatrefages, who regarded these
animals as bridging the gulf between the Worms and the Echinoderms. He included
in this group the genus Sternaspis (vide p. 335), now more usually classed with the
Chaetopoda.
The Gephyrea are exclusively marine. They are subcylindrical animals, which can
either retract the anterior end of their body—the introvert—carrying the mouth into
the interior; or are provided with a long flexible but non-retractile proboscis. The
latter is easily cast off. They usually bear spines or hooks of a hard chitinous
character, secreted by the epidermis or outermost layer of cells. The mouth is at the
base of the proboscis or at the end of the protractile part, the anus is at the other
end of the body or on the dorsal surface. The nervous system consists of a ring
round the mouth and of a ventral nerve-cord. A vascular system is present as a rule.
Nephridia are found which act as excretory organs, and in most cases also as ducts
for the generative cells. The Gephyrea are bisexual, and the male is sometimes
degenerate.
The group may be divided into four Orders:—(i.) Sipunculoidea; (ii.) Priapuloidea;
(iii.) Echiuroidea; (iv.) Epithetosomatoidea; of these the first is by far the largest,
both in number of genera and of species.
The Anatomy of Sipunculus nudus.
External Characters.—The body of S. nudus when fully extended may attain a

length of a foot, or even a little more; in this condition it is seen to consist of two
portions, the anterior of which is, however, retracted into the other when the animal
is disturbed. The retractile portion is sometimes termed the proboscis, but as its
nature is entirely different from that of the proboscis of the Echiuroidea, it is better to
refer to it as the introvert. Special retractor muscles are attached on the one hand to
the body-wall about half-way down the body, and on the other hand are fused into a
muscular sheath which surrounds the gullet, just behind the mouth. When these
muscles contract, they withdraw the introvert into the rest of the body or trunk in
much the same way as the finger of a glove may be drawn into the hand, by a
thread fastened to the inside of its apex. The introvert is protruded by the
contraction of the circular muscles of the body-wall. These exert a pressure on the
fluid which fills the body-cavity, and by this means the sides of the introvert are
forced forward until finally the head is exposed.
The introvert occupies about one-sixth or one-fifth of the total body length. It is
somewhat narrower than the trunk, and is covered by a number of small flattened
papillae, some of which lie with their free ends directed backward, overlapping one
another like tiles on a roof. In some other genera, as Phymosoma, the introvert
bears rows of horny hooks, which are apt to fall off as the animal grows old.
The trunk has from thirty to thirty-two longitudinal furrows, the elevations between
which correspond with a similar number of muscles lying in the skin. This
longitudinal marking is crossed at right angles by a circular marking of similar origin,
the elevations of which correspond with the circular muscles in the skin. These two
sets of markings thus divide the skin of the trunk into a number of small square
areas, very regularly arranged (Fig. 212).
The outline of the trunk is more or less uniform, but it is capable of considerable
change according to the state of contraction of its muscles. The circular muscles, for
instance, may be contracted at one level, thus causing a constriction at this spot.
The colour of S. nudus is a somewhat glistening greyish-white.
Fig. 211.—Right half of the anterior end of Sipunculus nudus L., seen from the inner
side and magnified. a, Funnel-shaped grooved tentacular crown leading to the
mouth; b, oesophagus; c, strands breaking up the cavity of the tentacular crown
into vascular spaces; c', heart; d, brain; e, ventral, and e', dorsal retractor
muscles; f, ventral nerve-cord; G, vascular spaces in tentacular crown.
The anterior end of the fully-expanded Sipunculus may be termed the head; here
the skin is produced into a frayed fringe which stands up in the shape of a funnel
round the mouth. This fringe is grooved on its internal surface with numerous little
gutters, all of them lined with cilia, which by their constant motion keep up a current
which sweeps food into the mouth. The fringe may be in the form of a simple ring
round the mouth, or the ring may be folded in at the dorsal side so as to take the
form of a double horse-shoe (Figs. 211 and 212).
Body-wall.—The glistening appearance of Sipunculus is due to the cuticle, a

chitinoid layer which is secreted by the external layer of cells, the epidermis.
Beneath this lies a layer of connective tissue, which is not always present in other
Gephyrea; within this lies a layer of circular muscles arranged in bundles, then
comes a very thin sheath of oblique muscular fibres, then a thicker layer of
longitudinal muscles, and finally a layer of peritoneal epithelial cells, which in
Sipunculus are for the most part ciliated.
Scattered over the surface of the body, and opening by narrow tubes which pierce
the cuticle, are a number of glandular bodies which may be either bi- or multi-
cellular. The glandular cells are apparently enlarged and modified epidermal cells;
they are arranged in a cup-shaped manner, with their apices directed towards the
orifice. They are crowded with granules, which are presumably poured out over the
cuticle, but the exact function of the secretion is entirely unknown. They have a well-
developed nerve supply.
Digestive System.—The mouth lies in the centre of the fringe, and is not provided
with any kind of jaw or biting armature; it leads directly into the thin-walled
alimentary canal, the first part of which is ciliated. The alimentary canal is not
marked out into definite regions, but passes as a thin-walled semi-transparent tube
to the posterior end of the body, and then turns forward again and opens to the
exterior by an anus situated about an inch below the junction of the introvert with the
trunk, on the median dorsal line. The descending and ascending limbs of the
alimentary canal are coiled together in a spiral, which may be more or less close in
different individuals. The whole is supported by numerous fine muscular strands,
which pass from the walls of the intestine to the skin, and by a spindle-muscle,
which runs from the extreme posterior end of the trunk up the axis of the spiral and
terminates in the skin close to the anus.
No glands open into the alimentary canal at any point of its course, but near the
anus a simple diverticulum, or pocket, of unknown function arises. The size of this
outgrowth differs enormously in different individuals. The alimentary canal near the
anus also bears two tuft-like organs, which, however, do not open into the intestine,
but probably have some function in connexion with the fluid in the body-cavity.
Along the whole course of the alimentary canal there runs a ciliated groove, into
which the food does not pass, but the cilia of which probably keep in motion a
current of water whose function may be respiratory.
Fig. 212.—Sipunculus nudus L., with introvert and head fully extended, laid open by
an incision along the right side to show the internal organs. × 2. a, Mouth; b,
ventral nerve-cord; c, heart; d, oesophagus; e, intestine; f, position of anus; g,
tuft-like organs; h, right nephridium; i, retractor muscles; j, diverticulum on
rectum. The spindle-muscle is seen overlying the rectum.
Vascular System.—On the dorsal surface of the anterior end of the alimentary
canal lies a contractile vessel, usually termed the heart. It is a tube about an inch
long, ending blindly behind, but opening in front into a ring-shaped space
surrounding the mouth and partially enveloping the brain. From this ring-like vessel
numerous branches are given off which pass into the fringe round the mouth, and
probably the chief function of the heart is by its contraction to force fluid into this
fringe, and so to extend it. The heart contains a corpusculated fluid. A similar but
shorter tube is found on the ventral surface of the anterior end of the alimentary
canal in the species in question; it also opens into the ring which surrounds the
mouth.
Respiratory System.—There are no special respiratory organs, and it has long

been a matter of dispute where the respiration of Gephyrea is carried on. The
oxygenation of the blood probably takes place to some extent through the walls of
the oral fringe, but the blood which receives its oxygen at this spot is limited in its
distribution, and could only supply the brain and head. It seems probable that the
remaining organs are supplied with oxygen by the fluid of the body-cavity, which
bathes them on all sides. This might obtain its oxygen from the blood in the heart, or
more probably, through the thin walls of the intestine, from the stream of water
which is maintained by the ciliated groove described above. Quite recently a form—
S. mundanus, var. branchiata—has been described[472] with thin-walled papillae
covering parts of the skin. These papillae are full of corpuscles, and are regarded by
their discoverer as branchiae.
Body-Cavity.—The pinkish fluid of the body-cavity contains numerous corpuscles,

the products of the reproductive organs (either ova or spermatozoa), and some
curious unicellular bodies known as "urns." The latter are shaped like a bowl with a
ciliated rim, and are formed from the budding of certain cells on the walls of the
dorsal blood-vessel.[473] Their function is unknown, but they resemble certain
multicellular bodies found in the body-cavity of Phascolosoma. The generative cells
found in the body-cavity are further considered below. The true corpuscles are
either biconcave round corpuscles coloured with a chemical substance, the
haemerythrin of Krukenberg, which apparently plays the same rôle as haemoglobin
in other animals; or amoeboid corpuscles, which, though rare in Sipunculus, are
very numerous in Phascolosoma.
Nervous System.—The nervous system of Sipunculus consists of a brain or

cerebral ganglion, a circumoesophageal ring surrounding the gullet, and a ventral
nerve-cord. The brain is a small bi-lobed nervous mass situated on the dorsal
surface of the oesophagus, in the angle between the right and left dorsal retractor
muscles close to their point of insertion. Numerous nerves arise from it, and pass to
the fringe surrounding the mouth and to neighbouring parts. At the sides, the brain
is continued into two stout nerve-cords which encircle the oesophagus, and
meeting, fuse together in the median ventral line to form the ventral nerve-cord (Fig.
211). The latter is of the same diameter throughout, and shows no signs of
segmentation; it is oval in section, and consists of small ganglion cells heaped up on
the ventral surface, i.e. next the skin, and of numerous fibres situated dorsally. The
cord gives off many nerves, which usually arise in pairs. These pass into the skin,
and forming rings, run round the body, and give off finer nerves as they go.
The nerve-cord is supported by numerous strands of muscle which pass to it from

the skin. These are especially long in the region where the introvert joins the trunk,
and thus allow free play to the nerve-cord when the former is being protruded or
retracted.
Sipunculus is not well provided with sense-organs, but in an animal which lives
buried in sand we should not expect to find these very highly developed. On the
introvert there are certain patches of epithelium bearing long stout cilia, which have
been regarded as tactile in function, and there is a tubular infolding reaching the
brain, which almost certainly has some sensory function. Ward[474] has termed this
"the cerebral organ." It consists of a duct lined with ciliated cells, which opens to the
exterior in the middle dorsal line outside the tentacular fringe. The duct leads down
to the brain, and expands at its lower end into a saucer-shaped space, covering that
portion of the brain where its substance is continuous with the external epithelium.
In Phymosoma this cavity is produced into two finger-shaped processes, which are
sunk into the brain and are lined by cells crowded with a dense black pigment.[475]
They are probably rudimentary eyes, perhaps distinguishing only between darkness
and light. The pits appear to be absent in Sipunculus nudus, but Andrews states
they are found, although without pigment, in S. gouldii.[476]
Excretory System.—The excretory organs or "brown tubes" are typical nephridia,

that is to say, they consist of tubes with glandular walls which open on the one side
to the exterior, and on the other by means of a ciliated funnel-shaped opening into
the body-cavity. In Gephyrea one wall of the tube is produced into a long
diverticulum or sac which hangs down into the body-cavity, and is usually supported
by muscle-fibres running to the body-wall. The lower end of the sac is broken up
into a number of crypts or pits, lined by large glandular cells crowded with brown
pigment. The pigment-granules are secreted into the cavity of the sac, and leave the
body through the external opening; they probably consist of the nitrogenous excreta
of the animal. The upper end of the sac, into which both the external and internal
orifices open, is usually enlarged, and its walls are very muscular. As in so many
other animals, the nephridia serve as ducts through which the reproductive cells
leave the body of the parent.
Reproductive System.—The Gephyrea are bisexual. In Sipunculus the testes and
ovaries are found in the same position in the two sexes, and are indistinguishable
without microscopic investigation. They each consist of small ridges situated at the
lower end of the ventral retractor muscles, just where the latter take their origin from
the longitudinal muscles of the skin. At this level the cells which line the body-cavity
on the inside of the skin are heaped up, and become modified in the one case into
ova or eggs, and in the other into the mother-cells of the spermatozoa. This method
of forming the reproductive organs from modified cells lining the body-cavity is very
common in the higher animals; but it is seen in its simplest and least modified form
in the Sipunculidae.
The eggs break away from the ovary in a very undeveloped condition, but whilst
floating about in the body-cavity they increase in size and secrete a thick membrane
around them. They have a well-marked nucleus, and are oval in outline.
The mother-cells of the spermatozoa also break away in an immature condition, and
complete their development in the nutritive fluid of the body-cavity. They divide into
a number of spermatozoa, usually eight or sixteen, which remain in contact. They
each develop a tail, which projects outwards, and aids the cluster in swimming
along. These clusters of spermatozoa are about the same size as the ova of the
female, and, like them, make their way into the "brown tubes." The exact way in
which this is accomplished is not very clear, but the cilia on the funnel-shaped
internal opening of the tube seem to have some power of selecting the generative
cells when they come within their reach, and of passing them on, whilst they reject
the much smaller corpuscles of the perivisceral fluid, which are never found in the
nephridia.[477] Once inside the internal opening, the clusters break up and the
spermatozoa escape singly into the sea. Here they meet with and fertilise the eggs
which have escaped from the body of the female.
Fig. 213.—Larva of Sipunculus nudus L. × 150. (After Hatschek.) a, Mouth; b, anus; c,

excretory organ; d, glandular appendage of oesophagus; e, wall of stomach over
which the retractor muscle runs; f, invaginated sense-organ at aboral pole.
Development.—Hatschek,[478] who investigated the development of Sipunculus
nudus at Pantano, an inlet of the sea near Messina, states that the spawning takes
place during the night, and ceases about July 10. The rate of development depends
upon the temperature, but the larvae usually free themselves from the egg-
membrane during the third day. When hatched the embryos lengthen out a good
deal, and take the form represented in Fig. 213. The larva swims actively by means
of a ring of stout cilia, which encircle the body just behind the mouth. Other shorter
cilia are found on the head, continuing into the lining of the mouth, and a little bunch
of them is situated at the extreme posterior end. The alimentary canal is already
formed, and is twisted, so that the anus lies dorsally, but not so far forward as it
does in the adult. A glandular structure opens into the mouth, and another body of
unknown function is connected with the oesophagus; both these disappear during
larval life. A pair of excretory tubules, the forerunners of the brown tubes, are found,
and the chief muscle tracts are already established. The nervous system is still in
close connexion with the skin, from the outer part of which it is derived; the cerebral
thickening bears two eye-spots.
The fluid of the body-cavity contains corpuscles, which are kept in active circulation
by the constant contractions of the body-wall, and by numerous tufts of cilia which
are borne on the inner surface of the skin. The dorsal blood-vessel is one of the
latest organs to arise.
The larva swims actively about for a month, during which time it increases greatly in
size; it then undergoes a somewhat sudden metamorphosis. The ciliated ring and
the structures related to the oesophagus begin to disappear, the distinction between
the head and the rest of the body is obliterated, and the head becomes relatively
small. The mouth changes its position, and becomes terminal instead of being
somewhat ventral, and the tentacular membrane begins to appear. At the same time
the larva relinquishes its free-swimming life, and sinks to the bottom; it begins
creeping amongst the sand by protruding and retracting the anterior part of its body,
and takes on all the characters and habits of the adult.
I. Order Sipunculoidea.
Besides the genus Sipunculus, the Order Sipunculoidea includes ten other genera.
A key to these, taken for the most part from Selenka's admirable monograph, is
given on page 424.
Phascolosoma contains, in comparison with Sipunculus, only small species, and it is

easily distinguished by the fact that the longitudinal muscles are fused into a
continuous sheath. As a rule the skin is smooth. A few species bear hooks, which
are generally scattered irregularly and not arranged in transverse rows, as in
Phymosoma (Fig. 214) and most of the other genera.
The fold which in S. nudus surrounds the mouth may be in the same species bent in
so as to take the form of a double horse-shoe, the opening of which is always
dorsal, just above the brain; in this case the mouth is crescentiform. In other genera
the fold is broken up into discrete tentacles, and these are variously arranged; in
Dendrostoma they are grouped together in four or six bundles round the mouth, but
the more usual arrangement is the horse-shoe-like row of tentacles which overhang
the crescentiform mouth, as in Phymosoma and some species of Aspidosiphon.
The ventral side of each tentacle is grooved and ciliated, and the grooves are
continued into the ciliated mouth. Their dorsal surface is pigmented, and in the
hollow of the horse-shoe lies a deeply pigmented epithelium covering the brain.
A blood-vessel courses up each tentacle, and usually two channels return the blood
to the vascular ring which surrounds the mouth. In those forms which possess
tentacles on the dorsal side of the mouth only, the ventral part of the vascular ring
lies in the lower lip, which is tumid and swollen. The brain supplies a nerve to each
tentacle.
When the introvert is retracted the tentacular ring is withdrawn and to some extent
collapsed; in this condition it would be almost touching the rough external surface of
the introvert. In some species of Phymosoma the delicate appendages of the head
are guarded from the hooks on the introvert by a thin membrane or collar,[479] which
completely ensheaths the retracted head.
Fig. 214.—A, Phymosoma granulatum F. S. Leuck. × 2. B, Head of the same. × 4. a,

Pigmented pit leading to brain. The crescentiform mouth on the lower side of the
figure is overhung by the tentacles.
When the introvert is fully extended the dorsal blood-vessel contracts and sends its
blood forward into the vascular ring, and thence into the tentacles or tentacular fold,
which are thus erected. In several species of Sipunculus, as S. nudus, S.
norvegicus, S. robustus, S. tesselatus, there is a ventral blind tube as well as a
dorsal, into which the blood is withdrawn when the head is retracted. In many other
species in various genera, such as Phymosoma weldonii and Ph. asser,
Dendrostoma signifer, S. vastus, the lumen of the dorsal vessel is increased by
numerous hollow blind processes which it bears, hanging freely into the body-cavity.
Three very small genera of Sipunculids—Onchnesoma, Petalostoma, and Tylosoma
—are devoid of all trace of vascular system and of tentacles; the mouth opens in the
centre of the anterior end of the introvert. In Onchnesoma the dorsal part of the lip is
somewhat produced, so that the head has somewhat the shape of a Doge's cap,
and in Petalostoma there are two leaf-like processes of the body-wall which guard
the mouth.
The extent to which the intestine is coiled varies very much even in the same
species; the axis of the coil is often supported by a spindle-muscle, but this is
sometimes absent. The caecum, which opens into the rectum of S. nudus, is again
a very variable structure, and when it is present varies remarkably in size.
The food of Sipunculids seems to consist almost entirely of sand, and their only
nourishment must be such small microscopic organisms or particles of animal and
vegetable débris as are to be found mixed with the sand. The alimentary canal is, as
a rule, quite full of sand, and yet in spite of the tenuity of its walls they never seem
to be ruptured. If the contents of the digestive tube be washed out with a pipette, it
will be found that it requires considerable force to dislodge many of the sand-
particles lying next the wall. These are more or less embedded in crypts or pockets
of the wall, and as the sand passes along the intestine they probably serve as more
or less fixed hard points, against which the sharp edges of the sand particles are
worn off. Amongst the sand are usually to be found pieces of shell, sometimes with
a diameter equal to that of the alimentary canal; these are usually rounded, but their
angles may have been removed by attrition before they entered the mouth of the
Sipunculid.
In S. tesselatus the sand is to some extent held together by a mucous deposit; in

those cases where there is no sand in the intestine, there is always a coagulum of
mucus, and the walls are contracted and thick; when full of sand the walls are
tensely stretched and very thin. This thinness of the wall of the alimentary canal
seems ill-adapted to a diet of sand, nevertheless it is also met with in other great
sand-eating groups of animals, such as the Echinids and the Holothurians.
The enormous amount of sand and mud which passes through the bodies of the
Sipunculids shows that they must take a considerable part in modifying the mineral
substances which form the bottom of the sea. Just as earthworms, as shown by
Darwin, play a considerable rôle in the formation of soil, so must these animals, in
conjunction with Echinids and Holothurians, effect considerable modifications in the
sand and mud which pass through their bodies. Mr. J. Y. Buchanan[480] is "led to
believe that the principal agent in the comminution of the mineral matter found at the
bottom of both deep and shallow seas and oceans, is the ground fauna of the sea,
which depends for its subsistence on the organic matter which it can extract from
the mud." The minerals at the bottom of the sea are exposed to a reducing process
in passing through the bodies of the animals which eat them, and subsequently to
an oxidising process due to the oxygen dissolved in the sea-water acting on the
minerals extruded from the animals' bodies.
The rate at which the sand passes through the body of Sipunculus is unfortunately
unknown, but that at any one moment a considerable quantity is contained in the
intestine is shown by the fact that the average weight of five specimens of S. nudus
from Naples, taken at random, was 19.08 grms., whilst the average weight of sand
washed out of their alimentary canal was 10.03 grms. The sand contained in five
other specimens of the same species measured respectively 6 c.c., 7 c.c., 6.5 c.c.,
7.5 c.c., and 7.5 c.c., giving an average of 6.9 c.c. for each individual.
Onchnesoma and Tylosoma have only one retractor muscle; Aspidosiphon and
Phascolion have, as a rule, two; Phymosoma and Sipunculus have four, and
perhaps this is the more usual number.
Phascolion, Tylosoma, and Onchnesoma have but one "brown tube"; in Phascolion
this is the right, in Onchnesoma it is sometimes the right and sometimes the left that
persists. Most other genera retain two, but there are many exceptions; for instance,
Phascolosoma squamatum has but one, and so has Aspidosiphon tortus, and in
both cases it is that of the left side. No Sipunculid has more than two. It has been
pointed out by Selenka that those species which have but one brown tube are, as a
rule, inhabitants of tubes or shells, and do not move actively about in the sand.
The eggs of all members of the family, with the exception of the genus Phymosoma,
are spherical, but those of the last-named genus are elliptical. They are always
surrounded by a thick membrane, the "zona radiata," pierced by numerous pores.
Aspidosiphon (Fig. 215) is easily recognised by the presence of two symmetrically-

arranged cuticular shields, one at each end of the trunk. These are formed by the
fusion of minute cuticular plates, such as exist in the skin of most Sipunculids. The
posterior shield is radially symmetrical, but the anterior is somewhat like the shell of
a Pecten, and symmetrical only about one plane. The introvert is protruded from the
acute angle of the anterior shield, and when extended lies almost at right angles to
the trunk, instead of being, as is usually the case, in the same straight line with it. In
many specimens, and these seem as a rule to be the older ones, a deposit of
calcium carbonate takes place over these shields, covering over and concealing
their external markings.
Cloeosiphon (Echinosiphon) has a calcareous ring, consisting of four or five rows of
lozenge-shaped calcareous bodies forming a close mosaic, arranged round the
base of the introvert, which when extended is in the same straight line as the trunk.
Each piece bears a brown spot, which is said to be the pore of a gland (Fig. 217).
Golfingia Lankester, has a cylindrical horny thickening at the anterior end of the
trunk and another at the posterior.
Fig. 215.—Aspidosiphon truncatus Kef. × 2. a, Introvert partially extended, but not

sufficiently to show the head.
Key to the Genera of Sipunculoidea.[481]
I. The longitudinal muscles in the body-wall divided into 17-41 distinct bundles.
Four retractor muscles.
A. Body covered with papillae. Numerous filiform tentacles which seldom (or
never?) surround the mouth, but stand above and dorsal to it in a horse-
shoe, with the opening dorsal. No rectal caecum. Hooks usually present.
Four retractors (in Ph. Rupellii only two?). Heart almost always without
caeca. Eye-spots always present. Eggs oval, flat, reddish. Almost entirely
small tropical species
1. Phymosoma
B. Body devoid of papillae. Tentacular membrane surrounds the mouth in a

circlet. Rectum with one or more caeca (except S. edulis?). Hooks absent
except in S. australis. Eggs spherical. The tentacular membrane contains a
vascular network. A ventral contractile vessel usually present in addition to
the heart. Mostly large forms. Found in all seas
2. Sipunculus
II. The longitudinal muscles in the body-wall form a continuous sheath, and are
not split up into bundles.
A. Two brown tubes. Numerous tentacles form a wreath round the mouth.
Alimentary canal forms a complete spiral, free behind except in Ph. Hanseni.
Spindle-muscle usually present. One or more ligaments present, but only on
the anterior convolutions of the intestine. Adhesive papillae always absent.
Hooks very frequently absent. Eggs spherical. Found in all seas.
3. Phascolosoma
B. Two free brown tubes. Only four or six plumed tentacles. A complete
intestinal spiral, not attached behind. Spindle-muscle always present. One or
more ligaments present, but only on the anterior convolutions of the
intestine. Hooks are present, but sometimes fall off early in life. Heart usually
bears caeca. Found only in the tropics.
4. Dendrostoma
C. Only one brown tube, that of the right side, present; it is attached to the
body-wall throughout its entire length. Numerous tentacles form a circle
round the mouth. The alimentary canal forms no spiral, or an incomplete
one. No spindle-muscle, but the intestine is attached to the body-wall
throughout its length by numerous ligaments. Adhesive papillae often
present. Not more than two retractors. Spherical eggs. Inhabits Mollusc
shells or tubes. Found in all seas
5. Phascolion
III. At both ends of the trunk a distinct horny shield, or tube-like cornification, or
a calcareous ring at the anterior end of the trunk. Hooks sometimes present.
Longitudinal muscles continuous or split up into bundles.
A. A shield at both ends of the trunk. Introvert excentric, arising from the
ventral side of the anterior shield. Tentacles small and few in number,
arranged in a horse-shoe above the mouth. A spindle-muscle, which arises
from the posterior end of the body, traverses the intestinal coil. Two
retractors only, these are the ventral; they are frequently fused together from
their point of origin.
6. Aspidosiphon
B. A calcareous ring surrounds the anterior end of the trunk, from the middle
of which the introvert is extruded. Longitudinal muscles continuous. Hooks
bifid. Tropical.
7. Cloeosiphon
C. A corneous ring, from which the introvert issues, surrounds the anterior
end of the trunk, and the posterior end of the trunk is produced into a
corneous spike. Six pinnate tentacles encircle the mouth. Four retractors.
Hooks present on the introvert. Longitudinal muscles continuous. Intestine
not coiled throughout in a spiral nor fastened posteriorly. Spindle muscle
present.
8. Golfingia
IV. No tentacles, but two leaf-like extensions of the body-wall guard the mouth.
Four retractors. Few intestinal loops, quite free. No vascular system.
9. Petalostoma
V. No tentacles, no vascular system. One retractor, and one segmental organ.
A. Introvert long. Body small, pear-shaped.

10. Onchnesoma
B. No introvert (?). Body cylindrical, thickly covered with papillae, which are
larger and more crowded at both ends of the trunk.
11. Tylosoma
Species of Sipunculoidea.—The genus Phymosoma (Fig. 214) contains more

species than any other genus of Sipunculoidea, and they are all of fair size. Twenty-
seven species are known, of which seventeen occur in the Malay Archipelago,
thirteen being found there alone. Phymosoma affects shallow water, the deepest
specimens being taken at a depth of about 50 fathoms; this may be due to the fact
that they flourish only in comparatively warm water. With very few exceptions, they
are found only in tropical seas, very often living in tubular excavations made in soft
coral rock.
The genus Sipunculus contains sixteen species. They are the largest and the most
conspicuous members of the group. They have a very wide distribution, some
species, as S. nudus (Fig. 212) and S. australis, being almost cosmopolitan. They
are most common in temperate and tropical seas, but S. norvegicus and S.
priapuloides are found far north, but always at considerable depths, 100 to 200
fathoms.
The following account of the habits of Sipunculus gouldii is taken from Mr.
Andrews'[482] paper on that species:—
"This Sipunculus is very abundant in certain small areas of compact, fine sand
darkened by organic matter and not laid bare at ordinary low tide. In such places,
only a few square metres in extent, they pierce the sand in all directions to a depth
of more than half a metre, making burrows with persistent lumen running from the
surface downward and then laterally, but with no regularity in direction.
"Kept in aquaria, the dependence of the animal upon the nature of the sand and its
method of locomotion may be readily observed. A vigorous individual buries itself in
a few moments in the following manner: Running out the introvert to nearly its full
extent, and applying it to the surface of the sand till some spot of less resistance is
found, the animal still further expands the introvert so that it penetrates the sand,
provided this is not too dense and firm, for then the body is merely shoved
backward. When the introvert is inserted, the contraction of the longitudinal muscles
of the body-wall brings the whole body forward somewhat, in case the introvert is
fixed in the sand. In case soft ooze was present, this fixation did not take place, and
the introvert was merely pulled out again, but when the sand was of the right
consistency the introvert was fixed by becoming much swollen at the tip, and then
constricted just posterior to this swollen area. This bulb-like area exerts lateral
pressure on the sand, as could be seen by movements of the grains. The swelling
of the anterior end of the introvert is brought about by the body-wall contracting
elsewhere, and forcing in liquid to distend that end. Owing to the curved form
assumed by the body in the normal contracted state when first removed from its
burrow, the entrance of the introvert may often be nearly vertical, and hence the
entire body is soon raised nearly upright in the water above the sand. If the body
has thus been warped forward sufficiently to become somewhat fixed in the sand,
the introvert is rolled in and again thrust forward from this new point of resistance,
and so on till the animal is entirely buried. This locomotion increases in speed as the
creature becomes more completely surrounded by sand, and is the only means of
moving from place to place.
"On a smooth surface, or on one not presenting the right degree of resistance, the
Sipunculus does not change its position, but remains till death finally occurs, rolling
its introvert in and out and contracting its body-wall to no purpose.
"The essential factors in the mechanism bringing about this hydrostatic locomotion
are an elongated contractile sac filled with liquid, and some means of definitely co-
ordinating the contractions of the sac.
"In natural environment the animals are found with sometimes one, sometimes the
other end nearer the surface of the sand: in the aquaria the same was observed, but
when the water became stagnant and impure the anterior end with expanded
branchiae was often protruded somewhat above the surface of the sand."
The genus Phascolosoma contains at least twenty-five species, for the most part
small. Ph. margaritaceum, however, measures[483] 10 cm. in length, and Ph.
flagriferum, 13 cm. The latter is produced at the hinder end of its trunk into a long
whip-like process, which recalls the horny spike of Golfingia. Most species live free,
but a few inhabit the shells of dead Gasteropods or of Dentalium, or the abandoned
tubes of worms. They occur in practically all seas.
Fig. 216.—Specimens of the Coral Heteropsammia cochlea, with Aspidosiphon
heteropsammiarum or A. michelini living in a state of commensalism with them.
(From Bouvier.)
Dendrostoma contains but five species, which are all found within the tropics in the
Pacific or in the West Atlantic. They are shallow-water forms, and some are found
between tide-marks.
Phascolion is a smaller genus, containing but ten species, which may have been
derived independently from different species of Phascolosoma, and in this case the
genus should be broken up. The members of this genus live in Mollusc shells, such
as Dentalium, Turritella, Buccinum, Chenopus (Aporrhais), Nassa, Strombus, and
generally acquire the coiled shape of their host. They are usually attached to the
shell by means of certain adhesive papillae found on their posterior end. Ph. strombi
fills its shell with mud, which must be kept together by some secretion of the animal.
The body lies in a tube in this mud, and the introvert projects from the small round
opening at the end of the tube, and explores the ground in every direction. They are
found in all seas, but more especially in the colder waters.
Fig. 217.—Cloeosiphon aspergillum Quatr. × ½. a, Introvert covered with spines and

partially extended, but not sufficiently to show the head; b, calcareous plates
surrounding the point of origin of the introvert.
The genus Aspidosiphon includes nineteen species, which are, with few exceptions,
exclusively confined to the Indian Ocean and neighbouring seas, including the Red
Sea. The exceptions are A. armatus from the Norwegian coast, and A. mülleri from
the Mediterranean and Adriatic. A. truncatus is also stated to occur at Panama, the
Bahamas, and at Mauritius. The remaining species almost all occur in the Malay
Archipelago and neighbouring islands, and as was the case with Phymosoma, this
part of the world seems to be the headquarters of the genus. A. mülleri lives in the
interstices of rocks and stones, and occasionally in disused Mollusc shells.
Two species of Aspidosiphon have been described by Bouvier[484] living in a state

of commensalism with two species of Madreporarian corals, Stephanoceris
rousseaui and Heteropsammia cochlea, which live on and surrounding the shells of
certain Molluscs at Aden (Fig. 216). Apparently the Gephyrean takes up its abode
within its house at a tender age, and according to Bouvier, it provides for its
increasing bulk by secreting a coiled calcareous tube, the outer surface of which
affords space for the growth of the coral.
The genus Cloeosiphon, the Echinosiphon of Sluiter, includes three species: C.

aspergillum (Fig. 217), C. molle, and C. javanicum. The first named occurs at
Mauritius, the Malay Archipelago, and neighbouring islands; the others are confined
to the last-named area, which thus again forms the headquarters of a genus.
Golfingia, described by Lankester from a single specimen, was dredged in St.

Andrews Bay, at the depth of 10 fathoms.
Petalostoma comprises but one species, P. minutum, which is found in the English
Channel.
Onchnesoma comprises two species, O. steenstrupii and O. sarsii, both found off
the coast of Norway at considerable depths between 200 and 300 fathoms.
Tylosoma comprises one species, T. lütkenii, also from the Norwegian coast. It is
dredged from stony ground in 50 to 80 fathoms.
II. Order Priapuloidea.
Anatomy.—This Order consists of the two genera Priapulus and Halicryptus. Both
are cylindrical animals with the mouth at one end and the anus at the other. The
introvert is short, and is covered with rows of chitinous spines, which are continued
to some extent over the body.
The skin is folded in a series of rings, and the body is usually somewhat swollen
posteriorly. P. caudatus bears a curious caudal appendage, beset with a number of
hollow lobes somewhat grape-like in appearance. This is situated ventral to the
anus; its lumen is continuous with that of the body-cavity, but it can be separated
from it by the action of a sphincter muscle. Two such appendages exist in P.
bicaudatus.
There cannot be said to be any head in the Priapuloidea; they have no tentacles or
tentacular fringe, no proboscis, and no distinct brain; simply a round aperture, the
mouth, which is surrounded by a groove in the skin, at the bottom of which the
circumoesophageal nerve-cord lies. The mouth leads into a very muscular pharynx
lined with stout chitinous teeth; this passes into an intestine, which is as a rule
straight, but in P. glandifer it has a single loop.
The Priapuloidea possess no vascular system and no brown tubes. Their skin has in
the main the same structure as that of the Sipunculids, with spines, glandular
bodies, and papillae with sensory hairs which resemble similar structures on
Phymosoma varians. Retractor muscles arise from the longitudinal muscles of the
skin, and are inserted into the pharynx; they are short and not constant in number.
The nervous system has retained throughout its primitive connexion with the
epidermis. In almost all animals the nervous system is formed from the epiblast or
outermost cellular layer of the embryo; it usually, however, breaks away from this
and sinks into the body. Thus in Sipunculus it lies within the body-cavity, and has
retained its primitive connexion with the outer layers of the skin only in the region of
the brain; but in the Priapulids the nervous system, which consists of a ring round
the mouth and of a ventral cord, lies embedded in the skin, and the nerve cells are
directly continuous with the cells of the epidermis. The nerve-ring lies at the base of
a groove in the skin, which forms a kind of gutter round the mouth; the ventral
nerve-cord is visible exteriorly as a light line which marks the ventral surface of the
animal. In no place is the ring or cord differentiated in any way, and there cannot be
said to be any brain or special sense-organs. Numerous nerves are given off from
the ring to the pharynx and intestine, and from the cord to the body-wall.
Fig. 218.—Priapulus caudatus Lam. Nat. size. a, Mouth surrounded by spines.
The sexes are distinct, but they differ from the other Gephyrea in the nature of their
reproductive organs. In mature specimens the ovaries or testes are easily
recognisable, lying to the right and left of the alimentary canal. The reproductive
glands are continuous with ducts, which act as oviducts and vasa deferentia
respectively. Both glands and ducts are attached to the body-wall by a mesentery.
The excretory function is performed in the Priapuloidea by the ducts of the

generative organs. These are primarily connected with a number of branching
canals of small size which project into the body-cavity. According to Schauinsland,
[485] one or more pear-shaped cells are found at the end of each branch, and each
is continued into a long cilium which hangs down into the lumen of the canal, and by
its movement produces a flickering motion. Beyond the free end of the large cilium
the canal is lined with ciliated cells. The remarkable resemblance this form of
excretory organ presents to that of the Platyhelminthes (vide p. 25) and of certain
Chaetopods is worthy of attention. In the young Priapuloidea the duct with its
branching canals is not masked by the generative organs, but as the animals
become mature, diverticula from the duct arise, and the cells covering these
become modified into ova in the female, and into spermatozoa in the male. The
presence of these follicles masks the excretory part of the gland. The ova and
spermatozoa escape through the ciliated ducts which open to the exterior one on
each side of the anus, and, contrary to what is the case with other Gephyrea, leave
the body without having ever been in the body-cavity.
Nothing is known of the embryology of either member of this family, but both genera
appear to be sexually mature from the end of May until October.
Classification.—The two genera which make up the Order Priapuloidea are

characterised as follows:—
Priapulus.—The body is continued into one or two caudal appendages, beset with
hollow papillae; these are ventral to the anus. The introvert forms ¼ to ⅓ of the total
body-length; it is covered with spines in conspicuous longitudinal rows, the rest of
the body being ringed. The retractor muscles are numerous, and are attached to the
body-wall, some anteriorly and some posteriorly.
The genus includes the following five species:—
P. caudatus Lam. (Fig. 218). Hab. Coasts of Greenland, Norway, Great Britain,
the North Sea, and the Baltic.
P. bicaudatus Dan. Hab. North Sea and Arctic Ocean.
P. glandifer Ehlers. Hab. Coast of Greenland, North Sea.

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Optimization of the Taxation System:

Preconditions, Tendencies and

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Optimization of the Taxation

ISSN 2198-4182 ISSN 2198-4190 (electronic)

Library of Congress Control Number: 2018956270

© Springer Nature Switzerland AG 2019

Part I Conceptual Foundations of Taxation

Part II Theory and Practice of the Tax System Operation

Part III Advanced Tools to Mitigate the Taxation System

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Part IV Optimization of Taxation at the Level of Separate

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Irina V. Gashenko, Yuliya S. Zima and Armenak V. Davidyan

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2 Materials and Method

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Irina V. Gashenko, Yuliya S. Zima and Armenak V. Davidyan

I. V. Gashenko (&) Y. S. Zima A. V. Davidyan

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