The Russian government has planned tax increases for 2027 which, according to the Russian Finance Ministry, will raise 3.7 trillion rubles from citizens and businesses. Reuters links these measures to reducing the budget deficit and financing a record increase in military spending.
The Russian Finance Ministry included the estimate in the draft budget law approved by the government last week. The document is due to be submitted to the State Duma on October 1.
Planned tax changes
Starting in 2027, the Russian authorities plan to introduce a “windfall tax” for cement and fertilizer producers, as well as gold-mining companies. The maximum personal income tax rate on individuals’ “passive income,” including bank deposits, is also set to rise to 22%.
In addition, a 22% VAT rate is planned for purchases from foreign online stores.
Russian Finance Ministry materials indicate that metals companies will pay about 200 billion rubles a year through the “windfall tax.” Over three years, the amount is expected to total 600 billion rubles.
Russian economists estimate that the higher personal income tax on “passive income” will impose additional costs on individuals of 500–700 billion rubles a year, or more than 2 trillion rubles over three years.
Military spending and budget deficit
According to the data cited, the Russian budget needs funds from citizens and businesses to finance another increase in military spending. Next year, the Kremlin plans to spend every third ruble on it.
Spending under the “national defense” category is set to increase from 12.9 trillion rubles this year to 17.1 trillion rubles next year. In total, Russia’s military budget for 2027–2029 is expected to reach 50 trillion rubles.
“Everything is being collected, everything is being scorched, just to plug the hole in the budget today.”
The Russian economy is increasingly feeling the effects of heavy spending on the war: economic growth has nearly stalled, the budget deficit is widening, and available reserves are shrinking.
