Russia is preparing a broader round of taxes on investment income, commodity producers and cross-border commerce as the government raises its spending plans for 2027 and keeps defense and security among its central budget priorities. The draft federal budget calls for 48.8 trillion rubles of spending next year against 43.3 trillion rubles of revenue, leaving a deficit of roughly 5.5 trillion rubles, or 2.2% of gross domestic product.
The size of that gap is more revealing when compared with the budget already on the books. Russia’s existing 2026-2028 budget law had projected 2027 revenue of 42.91 trillion rubles, spending of 46.10 trillion rubles and a deficit of 3.19 trillion rubles, equal to 1.2% of GDP. The new plan therefore assumes only a modest increase in revenue but nearly 2.7 trillion rubles more spending, widening the expected shortfall by more than 2 trillion rubles even as the government proposes additional taxes.
That distinction is important for markets because the new tax measures are not primarily filling a hole created by collapsing revenue assumptions. Instead, Moscow is trying to support a larger spending envelope while gradually bringing the fiscal position back toward its budget rule by 2029. The Finance Ministry has described defense and security financing as a strategic priority, alongside social commitments and other government programs, although the headline increase in total spending cannot be attributed entirely to military expenditures from the figures released so far.
The Tax Package Reaches Investors, Imports and Commodity Profits
For individuals, one of the most significant proposals would extend Russia’s full progressive personal-income-tax scale of 13% to 22% to so-called passive income. Dividends, bank-deposit interest, securities transactions, digital rights, property sales and several other forms of investment income currently face a narrower 13%-15% structure. The Finance Ministry estimates that the change would affect about 4 million taxpayers, or roughly 6% of people with taxable income.
The government is also targeting investment structures used to defer taxes. Mutual investment funds would become liable for a 15% profit tax on passive income, although the tax paid by a fund would be credited when investors themselves are taxed. The Finance Ministry argues that the current system, under which taxation can be delayed until income reaches the unit holder, creates opportunities to structure asset ownership primarily for tax purposes. Dividends paid to nonresidents through restricted Type C accounts would face a proposed 35% tax rate.
Consumers and online marketplaces would see changes as well. The package proposes applying Russia’s standard 22% value-added tax to goods purchased through cross-border e-commerce, with electronic marketplaces serving as tax agents, and introducing a 100-ruble customs fee on foreign parcels for personal use valued at up to €200. Those measures effectively narrow the tax advantage previously enjoyed by overseas online purchases and could raise the final cost of imported consumer goods.
The most immediate equity-market impact came from a proposed levy on commodity producers. Certain mining and metals companies would pay a 30% tax on additional income attributed to higher global prices for solid minerals in 2026 compared with a 2025 baseline, while gold producers would face a 20% rate. The Finance Ministry cited higher prices for precious and nonferrous metals, fertilizers and other commodities as generating additional resource rents, although detailed calculation rules have not yet been publicly established.
Russian commodity shares reacted quickly after the plan became public. Nornickel and fertilizer producer PhosAgro fell as much as 4.4% and 4.5%, respectively, during Thursday trading, while Seligdar dropped 4.4% and Polyus lost as much as 1.9% at one point. The moves reflect a direct earnings risk: depending on the eventual tax base and duration of the levy, part of the benefit producers have received from higher commodity prices could instead be transferred to the government.
Higher Spending Collides With a Weak Investment Backdrop
The fiscal expansion comes as Russia’s broader economic outlook has weakened. The government now expects industrial production to contract 0.2% in 2026, which would be its first annual decline since 2020, while capital investment is forecast to fall 5.4%, substantially worse than an earlier projection for a 1.5% decline. The Economy Ministry raised its GDP-growth forecast slightly to 0.6%, supported by consumption, but projected investment growth of just 0.2% in 2027 compared with an earlier 2% estimate.
Inflation is another constraint. The government’s 2026 forecast has been raised to 6.8%, while the Bank of Russia expects annual inflation of 6%-7% and has kept its key interest rate at 14%. The central bank said this month that fiscal policy continues to make a substantial contribution to domestic demand and explicitly warned that a larger structural primary deficit than assumed in its baseline could require tighter monetary policy than currently projected.
That creates a difficult trade-off for the government. Tax increases can reduce the amount of deficit financing needed and limit some inflationary pressure, but heavier taxation of investment returns and corporate profits can also weigh on private-sector capital formation at a time when investment is already contracting. If government spending remains higher than previously assumed, the central bank may have less room to reduce borrowing costs quickly even as private investment weakens.
Russia is attempting to limit some of the fiscal risk through a more conservative oil assumption. The 2027-2029 budget is being built around a base Urals crude price of $50 a barrel, with revenue generated above the budget-rule threshold available to replenish the National Wealth Fund rather than support permanently higher spending. Finance Minister Anton Siluanov has said the structure is intended to allow government obligations to be financed even at that oil price.
Oil revenue nevertheless remains only one part of the equation. Russia’s 2026 deficit is already expected to approach 3% of GDP, compared with the 1.6% originally written into the current budget law, and the new plan would begin 2027 with a deficit materially larger than previously envisioned. The government aims to narrow the structural imbalance and return to its budget rule by 2029, but getting there will depend on spending discipline, tax collections and the performance of an economy now facing weak industrial output, falling investment and still-high borrowing costs.
The next milestone is the submission and parliamentary consideration of the 2027-2029 budget and accompanying tax legislation. For markets, the details that matter most will be the final methodology and duration of the commodity windfall levy, whether the broader investment-income taxes are enacted as proposed, and how the Bank of Russia incorporates the larger fiscal path into its October monetary-policy forecast.