Russian Finance Ministry to impose a one-time tax on all large companies except oil and coal concerns

The Russian Ministry of Finance wants to collect a one-time tax (a so-called windfall tax) from all companies. However, Deputy Finance Minister Alexey Sazonov, says that oil and coal companies, as well as small and mid-sized businesses and companies with net profits under 1 billion rubles (around 13 million USD), will be exempt.

The tax will be collected on 2021–2022 profits that exceed 2018–2019 profits.

Interfax noted that, although exemptions for oil and coal companies and small-to-mid-sized businesses were announced up front, it is believed that the tax will not affect banks. When journalists asked for clarification on that point, Sazonov said, “at this point I haven’t heard about such exceptions.”

The Bell reported that in December, the Russian government suggested that businesses make a collective one-time payment of 200–250 billion rubles (around 2.7–3.3 billion USD). In response, the business sector proposed raising Russia’s 20 percent income tax by 0.5 percent in 2023.

After that, First Deputy Prime Minister Andrey Belousov announced that the government was discussing a one-time voluntary contribution to the budget. However, according to Belousov, the discussion was not about a tax rate increase but about a windfall tax. He noted that last year’s financial results were “very good” and many companies were “strongly in the black.” A source for Vedemosti who is close to the Russian government noted that the government is discussing raising around 250 billion rubles (around 3.3 billion USD).

In February, Finance Minister Anton Siluanov announced that the additional fee for large businesses would be collected via taxation, not a voluntary contribution. According to the minister, the total sum collected will total around 300 billion rubles (about 3.9 billion USD).