Putin Targets Miners and Wealthy Investors for New Taxes

President Vladimir Putin is directing new taxes at mining companies and wealthy individuals to fund state operations and the war in Ukraine. The government aims to squeeze revenue from an economy that has shifted heavily toward military production, leaving civilian needs underfunded.

The 2027-2029 state budget faces a vote in the Russian parliament on Thursday. Lawmakers are expected to approve the plan following the September parliamentary elections. This budget is paired with a series of tax increases that were announced after those elections.

Unlike last year's broad tax hikes on value-added tax and small businesses, the new measures target a specific group. The government is focusing on mining operations, investment income, property sales, and high balances in bank accounts. This shift moves the tax burden away from general consumers and onto specific asset holders.

The state budget deficit has expanded beyond initial forecasts. Military spending has risen sharply, while economic growth has slowed. The slowdown is driven by international sanctions, high interest rates for non-military firms, labor shortages, and Ukrainian attacks on oil refineries and export terminals.

The Russian parliament serves as a legislative body that typically ratifies decisions made by the executive branch. The upcoming vote is scheduled for Thursday. The tax changes will apply to the fiscal years 2027 through 2029.

The new tax structure requires mining companies to pay higher levies. Citizens with substantial investment portfolios or large bank deposits will also face increased rates. These measures are designed to generate additional cash flow for the state treasury.