Metals, fertilizers, and some other commodities are subject to an additional tax in Russia that would be based on the rouble-to-dollar exchange rate, according to sources in two significant exporting enterprises. The tax would be applicable to all significant export contributors to the Russian gross domestic product (GDP), with the exception of oil, gas, cereals, timber, …
Metals, fertilizers, and some other commodities are subject to an additional tax in Russia that would be based on the rouble-to-dollar exchange rate, according to sources in two significant exporting enterprises.
The tax would be applicable to all significant export contributors to the Russian gross domestic product (GDP), with the exception of oil, gas, cereals, timber, machine building, and scrap metal. It might be implemented in October and run until the end of 2023. One of the sources claimed that the concept “appears out of thin air; discussions about it were kept secret.”
The Interfax news agency was the first to report on the government’s deliberations; it cited sources who said that the tax would be implemented starting next month; however, one of its sources noted that it might possibly be prolonged to 2024.
One of the sources claims that the levy would only apply to “long-distance” exports, which would exclude supplies to Russia’s neighbours Belarus and Kazakhstan. Its prospects for 2024 are currently unknown.
As Moscow struggles with the expense of the conflict in Ukraine, President Vladimir Putin praised Russia’s economic health in June, citing encouraging data indicators. He also claimed that rising defence spending was necessary to bolster national security.
Between January and August, Russia’s budget deficit decreased to 2.36 trillion roubles ($24.6 billion), or 1.5% of GDP, as a result of declining receipts as well as rising expenditures, mainly for what Moscow refers to as its “special military operation” in Ukraine.
According to one of the sources, the level of the tax under consideration would initially be up to 7% when the exchange rate was greater than 95 roubles to the dollar and progressively decrease to 3% once the exchange rate was between 80 and 85 roubles. On Wednesday, the rouble was worth 96.15 to the dollar.
The Russian economic ministry declined to comment, while the ministry of finance did not respond to a request for comment.
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