No proposals on imposing windfall tax received by Russian Economic Development Ministry - ministry

MOSCOW. March 27 (Interfax) - No official proposals on imposing a windfall tax have been received by the Economic Development Ministry, the ministry's press service said.

"Yesterday at a State Duma meeting, MPs raised the issue of extracting natural resource rent from a number of companies and excess profits from banks. The issue of taxing resource rent was addressed in 2022, when adjustments were made to the MET [mineral extraction tax], making it progressive and linking it to the rise in commodity prices. If MPs have information that it makes sense to return to this instrument, then the relevant calculations need to be analyzed. As of now, no such proposals have been received by the Economic Development Ministry. In any case, at present, any such decisions also need to be correlated with the investment cycle in these industries, so as not to jeopardize already launched projects," the press service said.

The last time the authorities resorted to a windfall tax was in 2023, collecting over 300 billion rubles. It did not affect companies in the oil and gas sector or coal miners; the main payers of the windfall tax were the mining, metallurgy and trade sectors. Answering questions from MPs on Thursday, Economic Development Minister Maxim Reshetnikov recalled that after applying the windfall tax mechanism, the authorities adjusted the MET, making it "progressive in practice and tied it to the growth in prices for raw materials."

"We probably need to see how well this works and whether it was implemented in full everywhere. Because for a number of items, prices are now likely at levels that few assumed could even exist. This is a matter for separate analysis. We need to relate all this to the investment cycle in these sectors, so as not to jeopardize projects that have already been started. Therefore, we are ready for dialogue here," Reshetnikov said.

Subsequently, the head of the Russian Union of Industrialists and Entrepreneurs (RSPP), Alexander Shokhin, after a meeting between President Vladimir Putin and business representatives, said that the head of state expressed hope for a resolution of the Middle East crisis within the next 3-4 weeks. "Therefore, there is no talk of any windfall tax, because currently, only a limited number of companies, due to favorable market conditions, have the opportunity to earn a little more," Shokhin said.