Paul Goble
Staunton, Sept. 19 – Russian companies and especially those involved in the export of raw materials have seen their profits decline in recent months; and as a result, they are not paying their taxes in a timely fashion. Indeed, according to Rosstat, their tax indebtedness has now set a record.
During the first half of 2024, business tax indebtedness in Russia increased by 3.3 times to 176.2 billion rubles (1.7 billion US dollars), of which raw material exporters were responsible for three quarters of this amount (rosstat.gov.ru/storage/mediabank/osn-07-2024.pdf and moscowtimes.ru/2024/09/19/rossiiskii-biznes-rezko-perestal-platit-nalogi-dolgi-pered-byudzhetom-dostigli-istoricheskogo-rekorda-a142712).
In part this reflects the impact of sanctions generally – only two percent of Russian managers say sanctions haven’t affected them – but more importantly, it reflects the problems these companies are facing in repatriating profits from the sale of raw materials given increasing restrictions on transfer payments.
On the one hand, this non-payment is adding to Moscow’s budgetary woes and increasing inflationary pressures; on the other, it may help explain why some in the Kremlin appear to want to renationalize some companies. Were that to happen, the government would be able to pull more money out of these firms than it is at present.
But what is perhaps most striking about this report is that it suggests the Russian government has avoided the kind of draconian pressure on businesses that it has put on other sectors of Russian society, an indication that the Putin regime doesn’t want to alienate that group regardless of the consequences to its budgetary needs.
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