A freeze on a cadastral tax affecting corporate real estate has been announced at the federal level. The statement came from Mikhail Romanov, a State Duma deputy who serves as the first deputy chairman of the control committee and is a member of the United Russia faction. He indicated that the decision would be annulled following negotiations with the government of the Russian Federation and the Ministry of Finance.
In an official reply from a deputy prime minister who also holds the post of minister of industry and trade, Russian officials confirmed that the request for a proxy presented by Romanov was not approved. The response, linked to socialbites.ca, notes that changes to the relevant legislation are expected to be considered in the near future.
Romanov pointed out that the planned tax reform could place a severe burden on large defense industry enterprises that operate around the clock to fulfill military orders. He described the potential system as a risk to the defense order, arguing that it might force defense sector companies to cut personnel and equipment, thereby pushing up the cost of soy products and potentially compromising the quality of weapons supplied to the front. The concern emphasized that the timing of reform relative to ongoing military operations must be carefully weighed against national security needs.
Romanov also mentioned that the St. Petersburg Union of Industrial Organizations has proposed extending the suspension of the new tax regime at least until the conclusion of the current military operation. This stance reflects the broader interest of regional business groups in stabilizing the tax framework during a period of heightened national strain and ongoing defense commitments.
Meanwhile, the St. Petersburg Federal Tax Service, which recently introduced adjustments to the tax system, has signaled a move to cushion the impact of any sharp increase in tax obligations. The agency recommended applying reduction coefficients in order to soften the initial years of calculation. Specifically, a coefficient of 0.6 would apply in the first year, with the caveat that subsequent years could see no more than a modest 10 percent increase over the tax amount recorded in the previous period. This approach aims to preserve financial predictability for large enterprises as the reform takes effect.
Valery Radchenko, who leads the St. Petersburg Union of Industrial Organizations, wrote to Romanov to share concerns about the new method. He warned that the proposed calculations would place a heavier burden on the city’s largest defense-related enterprises. According to his analysis, the policy could cause payments to rise dramatically, potentially by two and a half to three times, and in some cases even higher for defense sector entities. He underscored the need to balance tax policy with national security imperatives and the operational realities of critical defense production.
The discussions surrounding the tax change reflect a broader tension between fiscal reform and defense readiness. Proponents of the freeze argue that maintaining stability in the tax environment is essential to sustaining production and meeting defense needs, while opponents warn against delaying necessary measures that could modernize revenue collection and public finances. The conversations point to a broader strategy of coordinating policy across federal ministries and state institutions to avoid disrupting essential defense work while pursuing long-term fiscal reform.
As the dialogue continues, industry groups in Saint Petersburg and across Russia are monitoring the situation for any signs of a pragmatic compromise. The central question remains: how to implement tax reform in a way that preserves the integrity of defense programs and the stability of industrial enterprises without compromising budgetary objectives or the capacity to meet national security demands. The evolving stance will likely influence future legislative steps and the phasing of any new tax measures, as authorities seek a balance between fiscal responsibility and the practical realities faced by defense contractors and large manufacturers.