Russia’s ministry of finance has announced the approval of a draft bill that seeks to impose a 10 percent windfall tax ( a government imposed levy on companies that have benefited from something they were not responsible for) on large Russian companies.
According to the announcement, the targeted companies are those that made over Ksh1.66 billion in profits since 2021. According to the first deputy prime minister, Andrei Belousor, the levy is predicted to raise about Ksh502 billion in taxes.
“They understand that they had huge windfall profit for 2021 and 2022, simply massive, bigger than the budget…I have a lot of respect for the entrepreneurs. Many of them are true patriots, no matter what people say about them. They identify very closely with the country,” he said.
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The country’s finance minister said that the taxes will be used for special spending. He however did not give any specifics about the spending.
There have been speculations by analysts of the Financial Times that Russia’s fertilizer and metal sectors were the most likely candidates that could be hit by the taxes since the announcement failed to specify the names of the companies.
The country’s energy is currently facing sanctions and boycotts by a number of Western countries and their allies despite the fact that the country is still a key commodity exporter especially in the agricultural sector and a number of industrial raw materials.
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In 2022, Russia imposed windfall taxes in order to fund the war in Ukraine. It levied the tax on Gazpron which is a mega energy giant after the natural gas price went up after its country’s invasion of Ukraine.