How Kremlin is making Russian business pay for the war
Due to a sharp decline in revenue and massive war expenses against Ukraine, russian government has found a new “reserve” for its budget — repressive fines from businesses. In the first quarter of 2025, russian tax service issued a record 190 billion rubles (about $2.5 billion) in fines and penalties — 86% more than last year. The majority of these are penalties for late tax payments.
▫️ Due to the war, businesses in russia are already on the brink of survival: expensive loans, sanctions, and declining sales. Now, the government is also actively trying to squeeze the maximum money from businesses to patch the growing budget deficit caused by falling oil and gas revenues.
However, repressive fines are not a solution to the problems but a delay of the inevitable. It’s like trying to put out a fire with a glass of water — a temporary solution that only worsens the situation. This will not create jobs or restore investments. The war is costing russia dearly, not only on the frontlines, and the longer it lasts, the deeper the economic crisis will be at home.
