Russia’s 2027 Budget Draft Puts Defense First—and Proposes New Taxes

Russia’s Finance Ministry is seeking more tax revenue to sustain military spending without eliminating federal deficits. Its draft budget for 2027 and plans for 2028–2029 put defense and security first and forecast a shortfall of roughly 2% of GDP in each of those years. The measures are proposals, not enacted tax changes. 18

What the draft prioritizes

The ministry calls defense and security a “strategic priority.” It says planned funding would help equip the armed forces with weapons and military equipment; the budget package also identifies support for service members and their families as a priority. The available excerpts do not establish precise allocations for those purposes. 348

For 2027 specifically, reported plans put revenue at 43.3 trillion rubles and spending at 48.8 trillion rubles, implying a deficit of 2.2% of GDP. That is consistent with the ministry’s broader forecast of a deficit of around 2% annually through 2029. 71

Which taxes would rise?

Passive personal income. The proposal would bring income such as dividends, bank-deposit interest, securities transactions and proceeds from property sales into a progressive 13%–22% tax scale, rather than the 13%–15% rates reported for those forms of income now. Other income listed in reporting includes proceeds related to digital rights, insurance contracts and gifts. The ministry estimates the change would affect about 4 million people, or no more than 6% of people with taxable income—not 6% of Russia’s entire population. One report says participants in Russia’s military operation would be exempt. 5262719

Online purchases and investment funds. The package reportedly proposes 22% VAT on cross-border e-commerce purchases, with online platforms acting as tax-collection agents. Reporting also identifies a proposed 15% profit tax for mutual investment funds; the available excerpt does not establish the full terms of that measure. 115

Commodity windfalls. A reported proposal would tax certain mining and metallurgy companies at 30% of additional 2026 revenue attributable to higher global prices, measured against a 2025 baseline. Reporting also identifies metals and fertilizers among the targeted areas. The available excerpts do not establish every sector-specific rate. 1122

Why the deficit matters—and what happens next

The new plan follows a deterioration in the 2026 outlook. Finance Minister Anton Siluanov forecast a deficit of about 3% of GDP, against an original target of 1.6% and a 2.6% deficit in 2025. He also indicated the government would plan to borrow more. A larger shortfall despite earlier tax increases helps explain the search for additional revenue. 2

The Finance Ministry submitted the draft budget, related budget-execution legislation and proposed Tax Code amendments to the government. The government must review the package before sending it to parliament ahead of the October 1 submission deadline. The reported measures should therefore be read as proposals whose final form depends on that process. 814

Some finer points circulating alongside the proposal—including a levy on transfers to non-resident “Type C” accounts, the treatment of indefinite fund-tax deferrals and a specific gold-miner windfall rate—are not established by the available source excerpts, so they should not be treated as confirmed provisions.