The Kremlin’s coffers are bleeding money for the war in Ukraine.
Now a tax is proposed that will bring in billions – from the country’s elite.
– They have a colossal abundance of profits, absolutely gigantic, says Deputy Prime Minister Andrei Belosouv.
Oil revenues are declining and sanctions from the West are putting pressure on the Russian economy. Now the Duman has presented a draft of a proposal. An unexpected tax that affects the country’s richest – the oligarchs.
Putin’s desperate move should bring in 300 billion rubles for the state, which corresponds to around 38 billion kroner. But those who are outwardly alleged to have come up with the proposal for the tax are said to be the oligarchs themselves.
– I’m going to tell you a big secret. The idea of this 300 billion tax comes from the companies, not the state, Deputy Prime Minister Andrei Belousov told Russian RBC.
“Has a colossal abundance”
The bill was presented on Tuesday. Companies that have made more than SEK 125 billion in profit since 2021 must pay a one-time tax of up to ten percent of the profits. Those who are expected to pay the most are companies in the metal and fertilizer industry, reports say Financial Times.
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The proposal behind the oligarch tax has been drawn up by the Duman.
1 / 2Photo: The State Duma, the Lower House of the Russian Parliament/AP
Belosouv believes that the oligarchs want to pay more taxes to the state to show their patriotism.
– They are smart and well informed. They understand that they have a colossal abundance of profits from 2021 and 2022, absolutely gigantic,” says Belosouv.
But not all oligarchs seem to be on board. An angry oligarch that the FT spoke to testifies that the tax proposal actually comes from the state.
– I don’t understand the idea. If you need money, just raise taxes. There is a sense that Putin has outwitted everyone again, including himself.
Great oligarch discontent
Discontent among the oligarchs has been great since the start of the war. But those who have spoken out critically have faced harsh punishment from Putin’s regime.
After banker Oleg Tinkov called it a “crazy war”, he was forced to sell his stake in Tinkoff Bank. He said that several oligarchs agreed with him about the insanity.
– They agree with me, but they are all afraid, he told the New York Times.
– I understood that the Putin regime was bad. But of course I had no idea that it would lead to such disastrous consequences. As long as Putin lives, nothing will change.
Could be a fog curtain
The tax could be a smokescreen to avoid further sanctions against Russian companies. Russian analyst Timur Nigmatullin believes that the tax will be “opaque” and that it minimizes the risk of sanctions, writes the Financial Times. It does not appear that the companies support the war.
In an attempt to avoid sanctions, Finance Minister Anton Siluanov has said that extra tax revenue should go to families with children, not to the war.
In the first half of this year, Putin has pumped money into the war in Ukraine. The Russian economy has a budget deficit of over SEK 400 billion, writes Russia Briefing.