2023-07-21 13:30:00
© REUTERS / Alexander Demianchuk
Retrospective special tax introduced, branches of western corporations nationalized.
War is expensive, even if you call it “special operations”. Almost a year and a half after invading Ukraine, Russia is introducing an additional tax for companies to plug holes in the state budget.
“For organizations with an average profit level of more than one billion rubles (around ten million euros) in 2021 and 2022 an excess profit tax will be introduced,” the State Duma announced on Friday.
The companies must also pay ten percent of the profits that were above the average profit for the years 2018 and 2019. If you pay by the end of November, you get a tax discount of 50 percent. The state expects revenues of 3 billion euros from this. However, that would only be about a tenth of the deficit of 2.9 trillion rubles (around 29 billion euros) cover.
➤ Read more: Which companies continue to do business with Russia
Excluded from the levy are the highly profitable oil, gas and coal companies. Official reason: You already pay a higher tax on land resources. The energy industry contributes about half of the Russian state budget.
nationalizations
Western companies doing business in Russia are under particular pressure. Recently, for example, it became known that the state would take control of the breweries of the Carlsberg Group take over. The Danes announced they were withdrawing from Russia in March and announced in June that they had found a buyer.
➤ Read more: All developments surrounding the war in Ukraine
The Russian business of the French food company Danone with 13 factories was also recently nationalized. Danone had also announced a withdrawal from Russia, now the assets of Jakub Zakriew managed, a nephew of the Chechen ruler Ramsan Kadyrov. Both acquisitions stem from a decree signed by President Vladimir Putin last Sunday.
rate hike
The Russian central bank raised the key interest rate by one point to 8.5 percent on Friday. It was the first increase since the beginning of the war. Although the inflation rate is below the targeted level of 4 percent, economists fear it will rise soon because the Russian ruble has been falling since the Wagner boss’s attempted coup Yevgeny Prigoschin has lost value.
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