Russia will impose a special tax on large companies that make more than a billion rubles in profits from 2021.
A senior tax official told RBC TV that the levy is expected to raise about $4 billion.
Amidst the war in Ukraine, Russia posted a deficit of almost 2.4 trillion rubles ($27.3 billion) in the first quarter.
We’re currently testing machine translations of articles by our US colleagues at Insider. This article has been automatically translated and checked by a real editor. We welcome feedback at the end of the article.
The Kremlin suffers so much from the war in the Ukrainethat he imposes a one-time profit tax on large Russian companies and their oligarchs.
As the Russian Ministry of Finance announced on Tuesdayit has approved a bill providing for a one-off profit tax of up to 10 percent for large Russian companies.
The tax will be aimed at companies making more than a billion rubles ($11.7 million) in profits annually since 2021, the announcement said.
That levy could bring in a total of about 300 billion rubles ($3.7 billion) in taxes, said Andrei Belousov, the first deputy prime minister. in an interview with RBC TV, as the news agency “Interfax” reported on Tuesday.
Belousov told business broadcaster RBC that the companies had proposed the taxes themselves.
“They understood that they had huge windfall profits for 2021 and 2022, just massive, bigger than budget,” Belousov said, according to Interfax. “I have big respect [vor den Unternehmern]. Many of them are true patriots, no matter what people say about them. They identify very strongly with their country.”
The Russian Treasury said in the announcement that the taxes would be used for social spending, without giving any details.
Although the announcement didn’t specify which companies could be affected by the taxes, analysts told the „Financial Times“ (“FT”) that Russia’s fertilizer and metals industries are possible candidates.
Despite Russia’s energy industry being sanctioned and boycotted by many Western countries and their allies, the country remains an important one commodity exporterparticularly in agriculture and some industrial commodities – which in turn benefits companies in these sectors.
Timur Nigmatullin, an analyst at Russian investment firm Finam, told the FT he expects information about the “windfall” taxes to be “opaque” to reduce the likelihood of those companies being sanctioned.
This is not the first time that Russia has levied special taxes to finance the war in Ukraine. Last year, the country imposed such a tax on energy giant Gazprom after natural gas prices soared to multi-year highs following Russia’s invasion of Ukraine.
Gazprom posted record profits in the first half of 2022, but net profit for the full year fell 40 percent year-on-year in the second half of the year due to the Kremlin’s tax hike.
read too
However, due to recession fears, energy prices have now fallen to pre-war levels.
Russia’s energy revenues have also been hit hard by sweeping export restrictions, particularly after the European Union – a major buyer of Russian energy – imposed a ban on Russian crude oil from December 5.
In the first quarter of 2023, Russia recorded a deficit of almost 2.4 trillion rubles ($27.3 billion), a sharp decrease from a surplus of over 1 trillion rubles ($11.4 billion) in the first quarter of 2022. The country recorded one Quarterly energy revenues fell 45 percent to 1.64 trillion rubles ($18 billion), according to data released April 7 by Russia’s Finance Ministry.
Read the original article in English here.