The Kremlin does not discuss the return to the tax on excess profits

No decisions have been made on the re-levying of excess profit tax (the so-called windfall tax) from businesses, such discussions are not underway in the Kremlin, said Dmitry Peskov, press secretary of the President of the Russian Federation.

“No decisions have been made in this regard. And in this case, I would recommend contacting either the government or experts. Here [в Кремле] there is no discussion on this matter, on this topic,” he said.

Earlier today, Deputy Finance Minister Alexei Sazanov allowed a return to the tax on excess profits, if “in the future, hypothetically, there will be a situation where there will be such excess income and the need to finance a large deficit.” Sazanov pointed to two reasons for the appearance of the tax: “opportunistic excess profits” of companies and “a significant budget deficit.”

The bill on excess profits tax was submitted by the government to the State Duma on June 13. On June 26, the initiative was supported by the State Duma Committee on Budget and Taxes. The bill will be considered by the lower house today, June 28. The Ministry of Finance expects to receive a total of about 300 billion rubles from the business. It is assumed that the proceeds from the tax will be used to support and develop the social sphere, including support for needy families.

The tax will be levied on the excess of the arithmetic average profit for 2021-2022. over the arithmetic mean of profit in 2018–2019. The rate is set at 10%, the tax must be paid no later than January 28, 2024. At the same time, if the fee is paid from October 1 to November 30, 2023, the business will receive a “discount” and the rate will be halved to 5%.