Business Chief Calls Profit Tax Hike Catastrophe

When we raise the profit tax rate, it kills investment potential. As of January 1, 2025, the government raised the profit tax rate from 20% to 25%.

Consensus

Alexei Repik, head of 'Delovoye Rossiya,' stated that increasing the corporate profit tax by 1–2 percentage points would lead to catastrophic consequences for investment in Russia.
The corporate profit tax rate was increased from 20% to 25% starting January 1, 2025.
Repik emphasized that a differentiated approach to taxpayers is necessary, distinguishing between those reinvesting profits and those distributing passive income.
Repik proposed a deferred tax deduction system based on a special investment tax certificate, allowing companies to claim up to 50% of investment costs back after five years.
The mechanism would allow companies to reduce their tax burden by 25 percentage points through reinvestment.
The idea of the deferred tax deduction was endorsed by President Vladimir Putin, who instructed the government to study and develop it.

Approximately 50% of capital investments in Russia are financed directly from companies' own net profit. — riamo
60% of investments in Russia are financed from company profits. — vesti
The proposed tax increase could be up to 0.5–1 percentage point for all companies, but Repik considers this approach flawed without compensatory mechanisms. — riamo
Large businesses preferred a temporary 0.5–1 percentage point increase for all companies over targeted fiscal levies on specific sectors. — vesti
Repik suggested that the tax rate could be raised to 30–35% if reinvestment mechanisms are introduced. — riamo
Repik stated he previously supported raising the tax to 30%, and even to 35%, provided a 25 percentage point reduction is available through reinvestment. — vesti