Page 64 - RusRPTDec23

6.1.2 Budget dynamics - specific issues...
Russia’s federal budget has already received around 40bn rubles ($453mn) out of the planned 300bn rubles ($3.4bn) on the windfall tax, Finance Minister Anton Siluanov said.Russian President Vladimir Putin endorsed earlier the law imposing a 10-percent windfall tax on large companies. The law is to take force on January 1, 2024. The tax must be paid no later than January 28, 2024, according to the document. It will be paid solely to the federal budget and will be a one-time fee, with around 300bn rubles ($3.4bn) worth of additional revenues expected.
Large Russian businesses are ready for an increase in the corporate profit tax in exchange for higher transparency and predictability of the fiscal policy, the head of the Russian Union of Industrialists and Entrepreneurs (RSPP) and veteran lobbyist Alexander Shokhin said, as cited by Forbes. This confirms previous unconfirmed reports that at the latest meeting with Vladimir Putin the RSPP signalled readiness to agree to further hikes taxes in exchange for long-term predictability of tax policy. This year the government imposed a so-called one-time “voluntary” windfall tax on the real sector worth a total RUB300bn ($4bn) of target revenues, while also introducing an unexpected exchange-rate-linked floating export duty for some commodities.
The State Duma has approved a proposal in its second reading to increase the so-called “damper”, or mineral extraction tax (MET) on natural gas, including gas condensate, which is also used as motor fuel.
This move is expected to raise the tax burden on Gazprom, one of Russia's major energy companies, although some of its subsidiaries, such as Gazpromneft, may not be affected.
Earlier, the state-owned oil company Rosneft had raised concerns that the original plans to raise MET on gas would disproportionately benefit Gazprom over smaller gas producers.
The tax increase, combined with Gazprom's loss of European export markets, will likely lead to higher domestic gas prices and a significant reduction in the company's investment program. It is anticipated that energy exporters will be exempt from the "extraprofit tax" introduced by the government earlier this year.
The primary objective of these tax changes is to offset the budgetary impact of fully reinstating "damper" payments, which are essentially compensation to oil companies for selling products in the domestic market. In September, the decision to halve these payments contributed to fuel price increases and
64 RUSSIA Country Report December 2023 www.intellinews.com