Russia to Implement Array of Tax Hikes from 2027-2029 for Military Funding
Russian Government Proposes Budget and Tax Changes to Support Military Spending
MOSCOW, Sept 24 (Reuters) - The Russian government projected a budget deficit equal to 2% of the gross domestic product for the next three years and proposed an array of tax hikes to sustain the military expenditure, the Finance Ministry's materials showed on Thursday.
Draft Budget Submission and Review Process
The Finance Ministry said it had submitted the draft budget to the government, which will review it before October 1 and send it to the parliament. It said that defence and security needs were a "strategic priority" for the new budget.
Strategic Priorities in the Budget
"The planned resources will enable the equipping of the armed forces with necessary weapons and military equipment, the modernisation of defence enterprises, the payment of monetary allowances to military personnel," the ministry said.
Economic Impact of the Ukraine War
The costs of the 4-1/2-year war in Ukraine have been increasing for Russia, with the economy slowing sharply last year and the government having to raise taxes and increase borrowing to finance the war effort.
Details of Proposed Tax Hikes
Targeted Sectors for Tax Increases
The ministry proposed hiking taxes on what it described as excess profits in the metals and fertilizer sectors due to high global prices, as well as taxes on trans-border electronic trade.
Taxation on Personal Investment Income
Scope and Impact of Personal Income Tax Changes
It had also proposed raising tax rates on so-called "passive" personal income from investment in securities, property sales, and interest from bank deposits. It said that the measure would affect about 4 million people.
(Reporting by Darya Korsunskaya; Writing by Gleb Bryanski; Editing by Alex Richardson)