Russian Big Business Ready to Pay Windfall Tax Instead of Voluntary Contributions to State Budget

Major businesses in the Russian Federation have expressed their willingness to pay an additional tax on windfall profits, known as a windfall tax, instead of participating in voluntary donations to the state budget. This information was shared by Alexander Shokhin, the head of the Russian Union of Industrialists and Entrepreneurs (RSPP), during a recent press conference. According to the Interfax news agency, this issue was discussed at a meeting between representatives of big business and President Vladimir Putin at the end of March.

Shokhin noted that the idea of introducing a windfall tax arose against the backdrop of a proposal from one businessman to make a voluntary contribution to the budget. However, both Putin and Shokhin believe that such contributions should remain a private initiative, while systemic solutions could be achieved through tax mechanisms, including the windfall tax.

At a closed meeting that took place after the RSPP congress on March 26, the issue of financing the continuation of military operations in Ukraine was indeed discussed. According to participants, either Putin or Igor Sechin, head of Rosneft, suggested that businessmen make voluntary contributions to the budget, to which billionaire Suleiman Kerimov promised to contribute 100 billion rubles, equivalent to approximately 1.3 billion US dollars.

Shokhin also emphasized that the Russian Ministry of Finance understands that such contributions can only be legally possible as private initiatives. "They, following the president, repeat that this is a voluntary matter, and if someone wishes, they will not be hindered. But for now, this issue, so to speak, is hanging. There are some willing, probably. We, as RSPP, are not engaged in this. We are ready to discuss the windfall tax," he stated.

Shokhin shared his thoughts on the mechanism of the windfall tax. He explained that during the meeting, where one of the participants suggested making a contribution, he himself raised the issue of the windfall tax. "I said, Vladimir Vladimirovich, the windfall tax was, if we find some companies that have received windfall profits under the current conditions. We had a formula... The formula is as follows: we take the last two years and the two previous ones, compare profits, see if there were any windfall profits, and tax them with some tax — this is normal, while voluntary contributions from corporations simply do not add up," he explained.

It is worth noting that the windfall tax mechanism and its formula are already outlined in Russian tax legislation, allowing for the introduction of no new taxes. "This is the simplest way — just refer to the existing tax," Shokhin added. He did not clarify whether payments could be made as early as mid-2026, but reminded that back in 2023, when the windfall tax was first applied, the authorities and businesses developed a mechanism for advance payments, allowing companies to make payments at a discount by the end of the year based on payments for the following year.

"Therefore, all mechanisms in the Tax Code are present. The other issue is that there are no profits; many are sitting at a loss," Shokhin concluded. Meanwhile, Deputy Finance Minister Alexei Sazanov stated that it is still too early to discuss the existence of a tax base for the windfall tax. He noted that profit tax declarations for 2025 are still being submitted and need to be analyzed. As for windfall profits in 2026, it is currently difficult to assess whether this is a one-time phenomenon, and it is unclear how long it will last. It is known that the Russian budget has not yet received windfall profits from the spike in oil prices caused by the war in the Middle East.