29 January 2026
Russian businesses had barely gotten used to the VAT hike when government officials began discussing the introduction of new taxes and increasing existing ones to protect the budget from the decline in oil and gas revenues, which accelerated sharply in early 2026.
The Ministry of Finance has prepared a draft decree introducing an export duty on diamonds, Deputy Minister Sergei Moiseyev announced on Thursday. He stated that this measure is aimed at “supporting” the domestic diamond cutting industry.
A day earlier, Deputy Minister of Natural Resources Konstantin Tsygankov announced a coordinated decision to sharply increase environmental fees charged by businesses. In the metallurgy sector, these fees will increase by 9-20 times between 2026 and 2030, by 15-25 times in gold mining, and by 5 times in the oil and gas sector. The base rate will increase in stages: by 5% this year and up to 100% by 2030, Kommersant reports.
The Ministry of Finance is also exploring the idea of introducing a tax on marketplaces importing large quantities of non-food products, Deputy Minister of Industry and Trade Roman Chekushov announced earlier this week. Furthermore, the ministry proposed to Vladimir Putin that online casinos be legalized and taxed at 30% of their revenue. This would raise 100 billion rubles for the budget.
The government will likely continue to raise taxes on individuals and businesses unless the situation with Russian oil prices improves, notes Natalia Milchakova, leading analyst at Freedom Finance Global. Russia’s main export grade, Urals, currently sells for $36-38 per barrel, while individual batches destined for Indian refineries fetched $22-25. Alfa Bank
estimates that this could result in a budget shortfall of nearly 3 trillion rubles in oil and gas revenue this year. Last year, they plummeted by 24%, reaching their lowest level since the pandemic (8.4 trillion rubles). This year, the Ministry of Finance has projected a rise to 8.9 trillion rubles. However, every $10 drop in oil prices relative to the budget level deprives the government of 1.5-1.8 trillion rubles, according to Alfa Bank estimates. Urals is currently priced almost $20 lower than the budget target ($59 per barrel). According to Reuters calculations, the treasury will collect the lowest oil and gas taxes in January since May 2020—half the amount collected in the same month a year earlier. The
budget deficit is clearly a key issue for Vladimir Putin, notes Janis Kluge of the German Institute for International and Security Affairs. Having spent over 40 trillion rubles on the military and weapons procurement since the start of the war, the Kremlin has exhausted almost two-thirds of the National Welfare Fund’s liquid assets. The fund’s gold holdings fell by 71%, from 554 to 160 tons. And its foreign currency holdings fell to their lowest level since the fund’s inception in 2008—around $30 billion in Chinese yuan.
According to VTB analysts, to cover the shortfall in commodity rents, the Ministry of Finance will have to withdraw 2.5 trillion rubles from the National Welfare Fund this year—approximately 60% of the unspent funds. MMI analysts estimate withdrawals of 3 trillion rubles, with another 700 billion rubles earmarked for “investments.” As a result, only 400 billion rubles could remain in the fund—an amount sufficient to cover approximately 3-4 days of federal budget expenditures.
If the Central Bank keeps interest rates high and oil and gas revenues decline, Russia will face a difficult choice: raise taxes again, cut spending, or increase debt, warns Sergey Konygin, chief economist at Sinara Bank. He estimates that this year’s budget deficit could be 1.5 times higher than planned—approximately 5.2 trillion rubles.
Sure, why not? There’s still some rubbles to squeeze out of the sheep, most of who still support this war.