Page 70 - bne IntelliNews Russia OUTLOOK 2025

and that this can be funded by taxes raised on this growth.
The tax code is being reformed steadily with increases to the mineral extraction tax and corporate taxes. Also in 2025, Russia will for the first time introduce a progressive taxes on the population that Putin has called a more equitable tax system, but is also one of the largest sources of government revenue.
Despite the rise in military spending, the 2025 federal budget deficit is projected to shrink to 0.5% of GDP from 1.7% in 2024 and 1.9% in 2023, before widening to 0.9% in 2026.
On the revenue side, increases to the Russian state budget are also planned. According to official preliminary information, revenues of the federal budget would expand by 12%, which is estimated to be less than the growth in expenses.
The tax changes coming into effect in 2025 are estimated to bring additional income to the consolidated budget (incl. federal and regional budgets and extra-budgetary funds) of approximately 1.3% of GDP.
Russia still has funds to cover larger expenses. The liquid portion of the Russian National Welfare Fund was RUB4.8 trillion, or 2.5% of GDP, at the end of August 2024.
However, a significant increase in public consumption weakens measures aimed at curbing inflation. These changes in budget plans show how changes in public spending are strongly influenced by the development of the war situation, which is difficult to predict.
National Projects
In the new three-year budget, it is planned to allocate more than RUB40 trillion from the federal budget for the implementation of national projects by 2030, which is twice as much as in the previous "six-year period".
The budget provides RUB6.9 trillion for social policy in 2025. In addition to social obligations, the budget priorities are ensuring security and defence, technological sovereignty and infrastructure development. RUB6.1 trillion will be allocated to achieve technological sovereignty over three years.
The Russian government will for the first time collect deposit taxes
MinFin is planning to raise RUB114bn ($1.1bn) on interest from retail deposits received in 2023, RBC business portal reports citing the head of the Federal Tax Service (FTS) Daniil Egorov. The government has
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