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Russia Targets Big Business With New 20% Windfall Tax to Plug War Budget Gap
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Russia is preparing to introduce an additional windfall tax on large companies as it seeks to offset growing economic strains linked to its war against Ukraine, according to Ukraine’s Foreign Intelligence Service on April 19.
Despite earlier proposals from Russian oligarchs to make voluntary contributions to the state budget to support war financing, the Kremlin is now considering imposing a mandatory “excess profits tax” on major businesses.
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According to the intelligence assessment, Russian authorities plan to introduce the new tax based on companies’ financial results for 2025. The proposed rate could reach as high as 20%, double the level applied during a previous campaign in 2023.
The tax would target profits exceeding the average levels recorded between 2018 and 2019, which were also used as a benchmark in earlier windfall tax measures covering 2021–2022.
“The previous windfall tax brought approximately 318.8 billion rubles into the Russian budget. At the same time, oil, gas, and coal companies were exempt from paying it, with the main burden falling on enterprises involved in mining ores, rare metals and phosphorites, as well as the production of pig iron, rolled steel, pipes, non-ferrous metals, and businesses operating in the trade sector,” the statement read.
The proposal for the new levy comes amid a worsening financial situation in Russia. According Foreign Intelligence Service, citing Russian Finance Ministry, the budget deficit in the first quarter of 2026 exceeded the annual target by 20%, reaching 4.576 trillion rubles against a planned 3.786 trillion for the year. An additional factor has been a 45.4% drop in oil and gas revenues compared to the same period in 2025.
Economists note that even potential gains from energy exports are unlikely to cover the budget shortfall. Against this backdrop, the government is being forced to look for new sources of revenue, including targeting businesses that have so far managed to remain profitable, the service added.
The proposed tax comes as broader economic indicators point to growing strain, with recent data showing Russia’s economy has entered contraction for the first time since March 2023 with GDP falling by 2.1% year-on-year in January compared to the same period in 2025.
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Russian officials attributed the slowdown to several factors, including a shorter working month and severe cold weather, which significantly affected industrial activity. The construction sector was particularly impacted, shrinking by 16% after recording 6% growth a year earlier, when milder winter conditions supported activity.
Despite these explanations, economists warn that the broader trend suggests stagnation rather than growth, with most key sectors showing signs of weakening underlying activity.
The deepening economic strain is also reflected in proposals from Russian oligarchs, who are calling for increased labor demands.
Russian billionaire Oleg Deripaska has suggested introducing a 12-hour, six-day work week as a way to speed up the country’s economic restructuring, The Moscow Times reported on March 30, 2026.
In posts on his social media, the industrialist argued that Russia faces limited resources and that overcoming the current global crisis would require a significant increase in labor intensity. Deripaska proposed an “8-to-8” schedule—from 8 a.m. to 8 p.m., including Saturdays—saying such measures are essential for the country’s economic survival.
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