Page 67 - RusRPTJul20

the Ministry of Finance.
Both oil and gas revenues decreased by half in May compared to April, to RUB214.2bn, and non-oil and gas revenues - by 2.7 times compared to April, to RUB674.7bn. But the collapse of non-oil and gas revenues in May is mainly due to one-off April budget revenues of RUB1.07 trillion, which the Central Bank transferred to the government from a transaction to purchase Sberbank . Excluding these revenues, May total budget revenues by April would have fallen by 26%.
Budget expenditures decreased by 28% compared to April - to RUB1.54 trillion. Total budget expenditures for this year are pencilled in as RUB21.9 trillion.
MinFin has reported on the federal budget execution for 5mo20: revenues declined 34.9% y/y in May​, with the decrease in oil taxes being especially pronounced (​66.3% y/y). At the same time, the contraction in non oil & gas revenues was not broad​based: domestic VAT rose +9.8% y/y, whereas imported VAT was down ​12% y/y
6.1.2 ​Budget dynamics - specific issues...
Russia will introduce a tax hike for top earners to help cover the costs of the coronavirus pandemic ​and patch a hole in the government’s revenues. The plans could see a new 15% income tax rate introduced for those earning more than 2-3mn rubles ($29,000-42,000) annually, Russia currently has a flat rate of income tax, set at 13%. The new higher bracket will affect less than 1% of the population and is largely for show.
The Russian government may cut financing of national projects by RUB140bn in 2021–2022, ​Izvestiya daily reported on June 30 quoting preliminary budget amendments drafted by the Finance Ministry. The amendments are connected in part to delays of projects and redistribution of resources in the coming years. The Demography national project will be cut most, by almost 150bn rubles in the next two years, or by more than 10%. A Finance Ministry representative said that the key factor for the cut was adjustment of a forecast for requests for maternity capital, Ivestiya reported. Adjustments to the other national projects are small, and financing some of
67​ RUSSIA Country Report​ July 2020 ​ ​www.intellinews.com