Russia’s Finance Ministry submitted a 2027–2029 budget package to the Government of the Russian Federation on 24 September 2026, including proposed Tax Code amendments covering personal income tax, PIFs, dividends, VAT, customs fees and natural resource rents. The package also included the draft federal budget and measures to support social spending, defence, infrastructure and technological development.
Russia’s Finance Ministry has proposed a series of Tax Code amendments as part of a budget package submitted to the Government of the Russian Federation on 24 September 2026, including changes to personal income tax, taxation of mutual funds (PIFs), dividends paid to non-residents, VAT on cross-border electronic commerce and natural resource rents.
The package includes a draft federal budget for 2027 and the planned period of 2028 and 2029, a draft law on the specifics of implementing the federal budget for the three-year period, and a draft law introducing certain amendments to the Tax Code of the Russian Federation to strengthen the sustainability of the budget system.
Personal income tax changes proposed
To unify the level of taxation of individual income at rates of 13–22%, the Finance Ministry proposed including “passive” income in the main personal income tax base.
The proposal would cover dividends and income from other equity participation, interest on deposits, transactions involving securities and digital rights, income from the sale of property and disposal of equity interests, as well as income under insurance and gift agreements.
Currently, “passive” income is taxed at rates of 13–15%. Under the proposed approach, the tax rate would depend on the amount of income rather than the method or source through which it was received.
The proposed changes would not affect the existing preference for small deposits, including a tax-free threshold of up to RUB 1 million. They would also not apply to income received by participants in the special military operation.
The proposed unification would affect no more than 6% of the population with taxable income, or approximately 4 million citizens.
PIF profit tax and non-resident dividends
The draft law proposed imposing on mutual funds (PIFs) an obligation to pay profit tax on passive income received at a rate of 15%. When taxing unit holders, the profit tax paid by the PIF would be credited.
Currently, PIFs do not pay profit tax, while taxation arises when income is distributed to unit holders, which may be deferred for a long period. This creates opportunities for tax optimisation by structuring ownership of various types of assets through PIFs.
The Finance Ministry also proposed increasing the profit tax rate on dividends paid to non-residents into “C” accounts to 35%.
22% VAT proposed for cross-border e-commerce
As part of measures to create a competitive environment and bring economic activity into the formal sector, the draft law proposed applying VAT at the standard rate of 22% to purchases of goods through cross-border electronic commerce.
Electronic trading platforms would pay the tax as agents.
The draft law also proposed introducing a customs fee of RUB 100 per parcel for goods for personal consumption worth up to EUR 200 that are sent from abroad by post.
Natural resource rent taxation
The budget package proposed further adjustments to the taxation of natural resource rents.
For the mining and metallurgical sector, a tax would be introduced for certain extractive organisations at a rate of 30% of additional income generated as a result of increases in global prices, in rouble terms, for solid minerals compared with the 2025 base level. The rate would be 20% for gold.
For certain types of products in rent-generating industries, including precious and non-ferrous metals and fertilisers, global prices rose sharply in 2026, generating additional rent income for companies.
The proposed tax would strengthen revenues at all levels of the budget system of the Russian Federation.
Budget deficit projected at 2% of GDP
The federal budget deficit was projected at approximately 2% of GDP annually over the three-year period.
Budget policy for the next three years was aimed at fulfilling all of the state’s social obligations, meeting the country’s defence and security needs, providing social support to participants in the special military operation and their families, and ensuring technological leadership.
“The draft budget has been prepared in a balanced manner. It will make it possible to fulfil all state obligations and maintain macroeconomic stability under any possible changes. Budget sustainability is not only a matter of sufficient resources, but also of the quality of their management. Therefore, the budget package provides for a set of measures to prioritise expenditure, while resources are concentrated on the areas that are most important for the state and citizens. All decisions included in the budget package are aimed at ensuring the sustainability of public finances and creating conditions for the country’s long-term economic growth,” Finance Minister Anton Siluanov said.
Pensions and family support
The draft budget provides funding for the indexation of pensions and benefits. Insurance pensions would be increased twice in 2027: by 6.8% from 1 February, in line with inflation in the previous year, and the insurance component of the pension would be additionally increased by 3.3% from 1 April, based on the rate of wage growth.
As a result, the average old-age pension would reach RUB 29,904 by the end of 2027.
The “children’s budget” for the three-year period would amount to RUB 10 trillion, including payments of the unified child benefit.
Funding was also provided for the annual indexation of maternity capital from 1 February, as well as for a family payment in the form of reimbursement of part of the personal income tax paid by Russian citizens with two or more children.
Approximately RUB 1.9 trillion was allocated to programmes to improve housing provision for families with children.
Education and healthcare funding
The draft federal budget for 2027–2029 provided funding for the development of education.
More than RUB 105 billion was planned for the construction of 150 schools by 2030. More than RUB 47 billion was earmarked for the renovation of kindergartens, with a further RUB 25.7 billion allocated for the construction of new facilities. More than 100 kindergartens were planned to be built by 2030.
Around RUB 80 billion was allocated for the renovation of university dormitories, while RUB 65 billion was allocated for technical colleges.
The funding would support the continued construction of new schools and modernisation of existing institutions, the equipping of classrooms, payments to class teachers and the implementation of other measures.
In healthcare, funding would continue for the national project “Long and Active Life”. Almost RUB 278 billion was planned for the modernisation of primary healthcare.
Funds would also be directed towards medicine provision programmes, including assistance for children with severe and rare diseases through the “Circle of Good” Foundation and under the 14 VZN programme, as well as towards the prevention of cardiovascular diseases and diabetes mellitus.
Defence, technology and infrastructure
A strategic budget priority was the financial provision of the country’s defence and security needs, as well as social support for participants in the special military operation and their families.
The planned resources would make it possible to equip the armed forces with the necessary weapons and military equipment, modernise defence industry enterprises, pay military personnel and support their families.
Almost RUB 2 trillion was allocated for national projects aimed at ensuring technological leadership during the upcoming three-year period.
Priority funding would continue under the national projects “Machine Tools” and “Unmanned Aviation Systems”. Their funding over the three years would increase to RUB 135.7 billion and RUB 103.3 billion, respectively.
The Industrial Development Fund (FRP) would receive additional capitalisation to provide preferential lending amounting to RUB 205 billion. This would support the implementation of new projects in industries related to technological development.
Funding for the road sector would exceed RUB 4.4 trillion over the three-year period. A further RUB 65.3 billion would be allocated for the renewal of public transport, including ground electric transport.
More than RUB 180 billion over three years would be allocated to the federal project “Formation of a Comfortable Urban Environment”.
Regional budget support and oil price
The draft budget provides substantial financial assistance to regions of the Russian Federation in the form of interbudgetary transfers. The provision of treasury infrastructure loans would also continue.
A draft law included in the package proposed giving regions a deferral for the repayment of budget loans whose repayment deadlines fall in 2027–2029, postponing them until 2030.
The measure would allow regions to reallocate RUB 300 billion in budget resources to address priority tasks.
Earlier, following an instruction from the President, a similar decision was made to postpone until 2030 the repayment of part of the budget loans scheduled for 2026, providing regions with an additional RUB 100 billion.
The draft budget was prepared on the basis of the baseline scenario of the socio-economic development forecast. To minimise the negative impact of external factors and ensure the unconditional fulfilment of all obligations undertaken, a base oil price of USD 50 per barrel would be established from 2027.
