Russia Proposes New Taxes on Miners and Foreign Investors
Russia's Finance Ministry proposed a 20% windfall tax on gold sales and a 30% levy on some other metals and fertilizer producers, citing higher commodity prices. It also plans to raise the tax on dividends to foreign investors from 'unfriendly' countries to 35% from 15%. The measures aim to narrow a budget deficit driven by war spending.
The draft 2026-2028 budget law, due before the State Duma by Sept. 30, pairs the new commodity and investor levies with a projected annual deficit near 2% of GDP. Officials expect the fresh taxes to close only about half a percentage point of that gap. The ministry also revised its 2026 inflation forecast upward to 6.8% from 5.2%, following strikes on Russian oil refineries that triggered fuel shortages, and now sees growth slowing to 1.3% in 2026 from 4.1% in 2024.
Defense spending in the draft declines nominally for the first time since 2022, dropping to 12.6 trillion rubles from 13.4 trillion. However, the adjacent national security and law enforcement category rises 13% to 3.91 trillion rubles, and combined military-security outlays still approached 40% of total expenditure in the 2025 budget. Putin has defended further tax increases by citing U.S. wartime levies during Vietnam and Korea.
These measures could place the heaviest burden on ordinary Russians, who already face higher VAT and accelerating inflation, while foreign investors from designated "unfriendly" countries see sharply reduced dividend returns. Commodity producers may pass some costs along or scale back output, potentially affecting employment in mining regions. The shift of spending between defense and security categories may signal a reallocation rather than a drawdown, suggesting the war's financial strain could persist well beyond 2026.