Initial discussions in the State Duma yielded a significant fiscal proposal aimed at reinforcing Russia’s federal budget amid ongoing international sanctions. Lawmakers considered a bill that would implement a one-time levy on the excess profits of large Russian companies, targeting profits above a defined threshold during 2021 and 2022. The measure, described as an emergency contribution, was reported by the lower house as part of the broader effort to stabilize public finances in a difficult economic climate.
The core objective behind this excess earnings tax is to boost federal revenue in response to the economic pressure resulting from Western sanctions. The proposed tax would apply at a rate of 10 percent on the portion of profits that exceeds the specified average threshold, with Finance Minister Anton Siluanov indicating that the anticipated yield could reach around 300 billion rubles. This revenue would help support budgetary needs and fund public programs during a period of financial strain.
The draft law, titled the Excess Earnings Tax, was introduced on its first reading with the government of the Russian Federation identified as the principal author. The document outlines a mechanism to impose an additional profit tax on organizations that report an arithmetic average profit above 1 billion rubles for the years 2021 and 2022. The intention is to secure supplementary resources for the federal budget while maintaining a clear, transparent framework for application across affected sectors.
On 28 June, a representative from Delovaya Rossiya, Alexei Repik, publicly described the origins of the initiative as stemming from the business community within Russia. What began as a targeted contingency measure affecting a relatively small number of large enterprises has, over time, broadened dramatically. The scope expanded to encompass an estimated thousand smaller companies by capitalization, a shift that reflects changing perceptions of market impact and the desire to ensure broader participation in the one-time contribution.
During the discussion, questions arose in relation to which institutions and organizations would be subject to the excess earnings tax, with the Ministry of Finance outlining the criteria and the threshold for inclusion. Observers note that the policy’s design seeks to balance fairness with administrative feasibility, aiming to minimize distortions in investment decisions while ensuring compliance across diverse corporate structures. The debate continues as legislators weigh potential effects on growth, employment, and long-term competitiveness in the Russian economy. In this context, experts emphasize the importance of clear guidance and consistent enforcement to sustain confidence among investors and domestic stakeholders. (Source: State Duma and financial authorities)”