Page 105 - RusRPTApr23

Oil and gas revenues amounted to 947bn rubles and decreased by 46% y/y, which was primarily due to lower prices for Urals oil and a decrease in natural gas exports.
Taking into account the decrease in the representativeness of Urals oil price quotations as an objective price indicator of export prices for Russian oil, the mechanism for determining the tax base for the relevant taxes was clarified in February. The adopted changes in the tax legislation will contribute to the gradual recovery of tax revenues from the oil sector, especially in the second half of this year.
In addition, the use of NWF funds to cover lost oil and gas revenues in accordance with the parametres of the “budget rule” ensures the stability of the budget system against fluctuations in oil and gas revenues.
Non-oil and gas revenues amounted to RUB 2,217bn and decreased by 9% y/y mainly due to a decrease in income tax revenue, which is mainly due to a one-time refund in January 2023 of tax overpayments for previous periods.
The dynamics of the receipt of turnover taxes (and domestic VAT in particular) normalised after a temporary reduction in January, associated with the operation of the accelerated procedure for VAT refunds.
In general, the volume of non-oil and gas revenues in January-February 2023 is in line with the dynamics laid down during the formation of the budget law (No. 466-FZ of December 5, 2022).
According to preliminary estimates, the volume of federal budget expenditures in January-February 2023 amounted to 5,744bn rubles , exceeding the figures for the same period last year by 52%. The acceleration of expenditure financing in early 2023 is mainly due to the rapid conclusion of contracts and the advance financing of certain contracted expenditures. This, among other things, will ensure a more even cash execution of federal budget expenditures during 2023.
In general, in 2023, the volume of federal budget expenditures will be formed based on the maximum amount of budget appropriations approved in the budget law (No. 466-FZ) and the amount of additional non-oil and gas revenues if they are formed during the year (in accordance with the norms of the “budget rule” ).
Increased flexibility in managing the structure of marginal budgetary appropriations in 2023, including, if necessary, directing them to contingencies, is ensured by the presence of unallocated reserves, as well as the release of budgetary appropriations in the amount of 1,496bn rubles due to an advance transfer to the Pension and Social Insurance Fund in December 2022 individual transfers envisaged for 2023.
105 RUSSIA Country Report Russia April 2023 www.intellinews.com