Russia Proposes Fresh Tax Hikes on Passive Income and E-Commerce to Fund 2027 War Deficit
The timing matters: the Kremlin denied these increases were under discussion weeks ago, and now the Finance Ministry is publicly tabling them anyway. This is not a policy reversal — it's an acknowledgment that war costs are non-negotiable and political cover for tax hikes must be abandoned.
The 30% windfall tax on mining and metallurgical companies is particularly telling: it assumes commodity price spikes will persist, which means Moscow is betting on either continued global supply disruptions or that sanctions on Russian minerals will keep prices elevated. If commodity prices normalize, that revenue line collapses, forcing another round of fiscal tightening before 2028.
Moscow is admitting that three years of sustained combat in Ukraine have exhausted conventional revenue sources — the fiscal strain has already doubled from 1.5% to 3% of GDP despite earlier tax increases this year, and the new proposal targets the highest-income earners and foreign capital flows because those are the only remaining pools large enough to matter.
The 13%-22% progressive tax on passive income is a direct levy on wealth accumulation, which signals the government expects the war to persist long enough to justify wealth redistribution; military exemptions from these taxes underscore that the state views defense spending as non-negotiable. Watch the State Duma markup in October — if opposition parties challenge the dividend tax on non-residents or the VAT on e-commerce, it will expose fissures in the ruling coalition over the war's fiscal sustainability.
Does the Finance Ministry's $50-per-barrel oil price assumption reflect genuine budget planning, or does it hedge against further sanctions on Russian crude exports that would crater revenues below that floor?
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