Putin reaches for cash with new taxes on miners and savers as war spending swells Russia’s deficit to $72 billion

With Russia's war in Ukraine draining state finances, President Vladimir Putin is seeking new sources of revenue to fund the ongoing military campaign. To address this, the government has proposed a series of tax hikes that will specifically target mining companies and high-income individuals. These measures will raise value-added taxes for miners and increase the rates on income generated from interest, dividends, and property sales.

Additionally, a windfall profits tax of 20%-30% on mining companies is being considered to help offset the country's ballooning budget deficit.

The current deficit stands at 5.8 trillion rubles ($72 billion) as of August, a 50% increase from the previous year and exceeding the revised target of 4.8 trillion rubles. This sharp rise in the deficit is attributed to increased military spending, economic slowdown due to sanctions, and high interest rates for non-military sectors. Meanwhile, sanctions have limited Russia's access to international financing, forcing the government to look for alternative sources of revenue.