A Russian official outlined the potential for a new tax on excess profits should the economy face a large budget deficit. In a recent interview, Deputy Minister of Finance Aleksey Sazanov explained that such a tax could be reconsidered if future conditions create a need to finance substantial shortfalls in the budget. The emphasis would be on capitalizing on extraordinary profits that some companies might earn beyond typical expectations, thereby contributing to the state coffers during times of fiscal strain. [DEA News attribution]
Sazanov said that conditions such as a projected budget deficit and what he described as opportunistic profits by large firms could justify a one time levy. The idea is to target the excess income generated by big players when the economy experiences unusually high earnings, allowing the government to mobilize additional resources without changing the general tax framework for ordinary business activity. [DEA News attribution]
Legislative momentum came from the State Duma, where the Budget and Tax Committee backed a proposed bill. The plan would impose a one off payment based on the surplus profits of sizable companies. The threshold would apply to firms whose average pre tax profits for the years 2021 and 2022 exceed one billion rubles. The rate would be set at 10 percent on the extra profit earned in those years. [DEA News attribution]
Earlier reports indicated that deputies from the Liberal Democratic Party pushed for another policy change in parallel, seeking to remove the personal income tax for residents earning below a monthly threshold. The move would target lower earned income brackets, reflecting a broader discussion about the balance between tax rates and household incomes. [DEA News attribution]