Kremlin's Tax Policies Reduce Willingness of Firms to Give Food to Needy

Paul Goble

            Staunton, Nov. 10 – Food banks which provide nourishment to people in need have spread to Russia. Most of the food involved comes from major grocery chains. But their ability to transfer outdated food to food banks, what Russians refer to as “food sharing” is seriously limited by the Kremlin’s tax policies.

            Firms that simply destroy food that is out of date bear no tax liability for it, but those who give food to food banks must pay up to 20 percent of its value for Value Added Taxes (VAT), something that makes destroying food less costly than giving it to those who need it (kommersant.ru/doc/8191557).

            Activists have proposed to Putin that he change this provision of the tax code so that companies will be able to give food to food banks more easily rather than deciding that their bottom line requires that they destroy it instead. But the Kremlin ruler has not taken any steps in that direction.

            That may seem a small thing. It certainly hasn’t attracted international attention. But it matters and can even be said to matter profoundly because this policybrings in more tax money to fund Putin’s war in Ukraine and reduces the amount of food that Russia’s poorest have access to.