Finance Ministry Unveils 2027 Budget Draft With Fresh Tax Hikes to Fund War Deficit
The proposal would raise rates on passive income, dividend transfers and online imports as Moscow seeks revenue for widening budget pressure.
- The Finance Ministry submitted its 2027 draft budget proposal to the State Duma on Thursday, introducing tax increases on passive income, e-commerce, and corporate windfalls to fund rising military spending.
- Despite previous tax hikes earlier this year, Russia failed to ease fiscal strain on the federal budget, which is expected to reach 3% of GDP by the end of 2026, nearly double the planned amount.
- The proposal outlines a progressive tax scale of 13%-22% on passive income, a 35% tax on non-resident "Type C" dividends, and a 22% VAT on cross-border online retail purchases affecting roughly 4 million high-income Russians.
- Defending the proposed tax hikes, the Finance Ministry said the budget "addresses all social obligations, supports defense and security, helps participants of the special military operation and their families and advances technological leadership."
- Russia projects a 2027 budget deficit of around 2% of GDP based on a benchmark oil price of $50 per barrel, while the Finance Ministry must submit this proposal to the State Duma by Oct 1.
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According to the Russian Ministry of Finance, "the resources provided will enable the armed forces to be equipped with the necessary military equipment and to modernize defence companies".
The Russian government is set to raise taxes on citizens and businesses for the third year in a row to fill the federal budget. Up to half of all budget funds are spent on the war, and this year the budget deficit will reach almost 7 trillion rubles (about 71.4 billion euros), writes The Moscow Times.
Finance Ministry Unveils 2027 Budget Draft With Fresh Tax Hikes to Fund War Deficit
Russia’s Finance Ministry submitted its draft budget proposal for 2027 on Thursday, introducing a fresh round of tax increases on passive income, e-commerce and corporate windfalls as Moscow struggles to fund soaring military spending.
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