2027 Budget: Austerity Measures and New Taxes

Last Thursday, the government approved the draft budget for the next three years. It will be submitted to the Duma and published in the coming days.

For 2027, the Ministry of Finance projects revenues of 43.3 trillion rubles (451 billion euros) and expenditures of 48.8 trillion rubles (508 billion euros). The deficit of 5.5 trillion rubles (57 billion euros) corresponds to 2.2% of gross domestic product (GDP). The 2026 budget was planned in September 2025 with a deficit of 3.8 trillion rubles (39.6 billion euros), or 1.6% of GDP. By the end of August, the deficit stood at 5.8 trillion rubles (60.4 billion euros), or 2.5% of GDP. Finance Minister Anton Siluanov (pictured right) now expects a deficit of up to 3% for the full year.

Compared to the current 2026 budget, government revenues are projected to rise by 7.4% and expenditures by 5.7%, according to calculations by the business newspaper Kommersant based on data from the “Electronic Budget” portal. The paper writes that higher spending is unlikely to allow for the “modest growth” and “stagnant investment” expected in 2027. The Ministry of Economic Development, on whose new forecast the draft is based, expects GDP growth of 1.4% in 2027, following 0.6% in the current year. Investment is projected to rise by 0.2%, after likely falling by 5.4% in 2026.

The oil price, which the Ministry of Finance has estimated conservatively, could serve as a buffer. Although the price of oil is currently above $100 per barrel of Brent and there is no end in sight to the conflict in the Middle East, the 2027 draft budget anticipates a base price of $50 per barrel of Urals. Siluanov clarified that additional revenue from higher oil prices is to flow into the National Wealth Fund. The Ministry of Economic Development expects the average price for Urals to be $61.20 per barrel this year, falling to just $53 in 2027.

Focus on Investment Income and Commodities

Kommersant describes the 2.2% deficit as moderate because it is below the figure expected for 2026. It is to be achieved through annual savings of more than 2 trillion rubles (21 billion euros) and “selective tax increases,” as the newspaper reports.

In the future, dividends, interest on deposits, and profits from the sale of securities and real estate will be taxed at progressive rates of 13–22%, rather than the current rates of 13% or 15%. According to the Ministry of Finance, this would affect approximately 4 million citizens. Investment funds are to pay a 15% profit tax on passive income such as dividends, interest, or rent. Dividends paid to foreign companies from “unfriendly” countries into Type C blocked accounts are to be taxed at 35% instead of 15%. In addition, there will be a so-called excess profits tax for metal and fertilizer producers. It amounts to 30% and is based not on profit, but on the additional revenue resulting from the rise in world market prices—calculated in rubles—compared to the reference year 2025. For gold miners, the rate is to be 20%. Online purchases from abroad will be subject to the full VAT rate of 22%, plus a customs fee of 100 rubles (1.04 euros) per package valued at less than 200 euros.

The ministry has not yet disclosed the total amount of expected additional revenue. According to the ministry, measures against the shadow economy—including gray imports—are expected to generate approximately 500 billion rubles (5.2 billion euros) per year. The Russian investment firm Freedom Global estimates that revenue from the progressive tax on passive income will amount to 100–180 billion rubles (1–1.9 billion euros) in the coming year, while the Moscow-based asset manager Astra believes as much as 500–700 billion rubles (5.2–7.3 billion euros) per year is possible. According to experts, the excess profits tax could generate 100–200 billion rubles (1–2.1 billion euros). By way of comparison: The 2025 tax reform, featuring a progressive income tax and higher corporate income tax, was projected to generate approximately 2.6 trillion rubles (27 billion euros), while the 2026 reform was projected to generate 1.7 trillion rubles (18 billion euros), of which 1.2 trillion rubles (12.5 billion euros) would come solely from the higher value-added tax. The total amount of additional revenue generated so far this year is not known. The Federal Tax Service estimated the impact of the value-added tax increase—raised by two percentage points to 22%—at 426 billion rubles (4.4 billion euros) in the first half of 2026.

Market Surprised by Tax Plans

Shortly after the details were announced, the Moscow Stock Exchange’s benchmark index turned negative and temporarily lost up to 1.3%. Irina Krivosheeva, head of the Moscow-based asset management firm Alfa-Capital, criticized the fact that the proposals had not been discussed with market participants in advance. The Ministry of Finance preferred to increase the budget’s capitalization rather than that of the stock market, according to a headline by the business portal Frank Media. Russian citizens and companies fear new tax packages from the Ministry of Finance more than they fear new sanctions from the West, Frank Media wrote. Economist Viktor Tunev, operator of the Telegram channel Truevalue, criticized the tax increases, saying they “repeat the mistakes of past years.” Tunev argued that anyone who combats the deficit and inflation with higher taxes instead of lower spending ends up in a vicious cycle.

Alexander Yunashov, a journalist with the Kremlin press pool, pointed out on his Telegram channel that the tax hikes were presented immediately after the Duma election, even though government officials had previously assured the public that there were no such plans. When asked whether this could damage public confidence in the government, Kremlin spokesman Dmitry Peskov referred him to the government and its economic team.

Sources: Frank Media, Interfax 1, 2, Ministry of Finance, Kommersant 1, 2, RBC, Vedomosti 1, 2, 3, T-Bank 1, 2, Junaschew Live (all RU)

Source: German-Russian Chamber of Foreign Trade, 2027 Budget: Austerity Measures and New Taxes, September 29, 2026.

This article was prepared for the German-Russian Chamber of Foreign Trade.