Budget fails: Putin's war to be paid for by Russian business

The Kremlin regime intends to increase tax pressure on domestic producers in order to resolve the issue of war financing, Bloomberg says.

In particular, the publication stresses that the Russian authorities are preparing to seize funds from major producers of raw materials and state companies. It is about those companies which are not involved in defense and do not produce anything useful for the war. Thus, it is proposed to establish a permanent "levy" in favor of the war at a level not lower than 50% of the net profit of all state companies.

Prime Minister Mikhail Mishustin called this approach "revenue mobilization" and has already suggested collecting "one-off payments for the war" from coal and fertilizer producers in the near future. In addition, Mishustin ordered to "optimize" expenses outside the defense and security sphere, which should save at least 150 billion rubles.

It is specified that the "mobilised" money will be used to cover expenses related to a full-scale war in Ukraine.

The Russian government is also puzzled as to where to find 175 billion rubles. They plan to spend it on the resettlement of 100,000 people from Kherson Region to Russia. The publication pointed out that this may indicate that the Russian authorities recognize the impossibility of re-occupying the city.

Experts concede that the increased burden on business will entail another rise in prices of a number of goods and services in Russia.