Finance Ministry Unveils 2027 Budget Draft With Fresh Tax Hikes to Fund War Deficit

Sep. 24, 2026 The Russian Ministry of Finance. The Moscow Times Russia’s Finance Ministry submitted its draft budget proposal for 2027 on Thursday, introducing a fresh round of tax increases on passive income, e-commerce and corporate windfalls as Moscow struggles to fund soaring military spending. Each year, the Finance Ministry must submit its draft federal budget for the upcoming fiscal year to the lower-house State Duma no later than Oct. 1. The 2027 proposal outlines a new progressive tax scale of 13%-22% on passive personal income, including bank deposit interest, stock dividends, real estate sales and securities trading. Those income sources are currently taxed at a rate of 13-15%. Policymakers estimate the increase would affect roughly 4 million high-income Russians. Military personnel would be exempt from the tax increase. To extract additional revenue, the draft budget proposes a 35% tax on dividend payouts transferred to non-resident “Type C” bank accounts and subjects mutual investment funds to a 15% tax on passive earnings, eliminating their ability to defer profit taxes indefinitely. The Finance Ministry has also proposed applying a 22% value-added tax (VAT) to cross-border online retail purchases, alongside a flat customs fee of 100 rubles ($1.18) on international packages valued under 200 euros ($227). In addition, mining and metallurgical companies would face a 30% tax on excess earnings generated by recent spikes in global commodity prices. Defending the proposed tax hikes, which the Kremlin recently denied were under discussion, the Finance Ministry noted that defense and security remain a priority for the government. The budget proposal “addresses all social obligations, supports defense and security, helps participants of the special military operation and their families and advances technological leadership,” the ministry said. Russia’s 2027 draft budget projects a deficit of around 2% of GDP based on an assumed benchmark oil price of $50 per barrel. Despite having already increased taxes earlier this year, Russia’s government has so far failed to ease the fiscal strain on the federal budget, which is expected to reach 3% of GDP by the end of 2026, almost double the planned amount. The Kremlin declined to comment on the budget proposal on Thursday. Read more about: Budget , Finance Ministry , Tax Sign up for our free weekly newsletter Our weekly newsletter contains a hand-picked selection of news, features, analysis and more from The Moscow Times. You will receive it in your mailbox every Friday. Never miss the latest news from Russia. Preview Subscribers agree to the Privacy Policy We sent a confirmation to your email. Please confirm your subscription. A Message from The Moscow Times: Dear readers, We are facing unprecedented challenges. Russia's Prosecutor General's Office has designated The Moscow Times as an "undesirable" organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a "foreign agent." These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work "discredits the decisions of the Russian leadership." We see things differently: we strive to provide accurate, unbiased reporting on Russia. We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help. Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and every contribution makes a significant impact. By supporting The Moscow Times, you're defending open, independent journalism in the face of repression. Thank you for standing with us. Once Monthly Annual Continue Not ready to support today? Remind me later. × Remind me next month Remind me Thank you! Your reminder is set. We will send you one reminder email a month from now. For details on the personal data we collect and how it is used, please see our Privacy Policy. Read more Russia Weighs 10% Budget Spending Cuts as Revenues Slump – Reuters The final decision will depend largely on how long the current oil price increase triggered by the Iran war lasts, Reuters' sources said. 2 Min read Russia’s Customs Revenues Fall 20% in 2025, Deepening Budget Shortfall The shortfall reflects weaker trade volumes amid falling commodity prices and the impact of restrictive measures, analysts said. 2 Min read More Taxes for More War: Unpacking Russia’s 2026 Budget The proposed budget underscores the Kremlin’s resolve to press on with the war — even if it means higher costs for businesses and consumers. 6 Min read Russia Moves to Raise VAT by 2% as Budget Deficit Swells The proposed increase comes as the Finance Ministry now forecasts GDP growth slowing to 1% this year, down from an earlier 2.5% estimate. 3 Min read