"The Kremlin is on the verge of implementing a mandatory "exit fee" for every Russian citizen wishing to travel abroad. This measure is intended to both bolster state revenues and curb capital outflows from the country. According to Kyrylo Shevchenko, the former Governor of the National Bank of Ukraine, this proposed fee would be a flat-rate charge applicable to all private travel, effectively functioning as a tax on tourism and non-essential journeys outside Russia."
"The Kremlin is desperately short of cash. This statement aligns with reports from the Moscow Times, which indicate that the Russian state is grappling with diminishing revenues from oil and gas exports, coupled with escalating defence expenditures. These financial challenges have compelled the government to explore innovative solutions to bridge the budget deficit, especially as the anticipated economic benefits from wartime activities have started to wane."
"This potential introduction of an exit fee coincides with a broader trend of increasing taxes within the Russian economy. Earlier this year, in January, the government raised the Value Added Tax (VAT) from 20% to 22%. Additionally, corporate tax rates were increased, and a new five-tier personal income tax system was introduced, with rates spanning from 13% to 22%."
The Kremlin is considering implementing a mandatory exit fee for Russian citizens traveling abroad as a measure to generate state revenue and curb capital outflows. This flat-rate charge would apply to all private travel, functioning as a tax on tourism and non-essential journeys, while exempting business-related travel and diplomatic missions. The proposal reflects Russia's severe financial crisis, driven by diminishing oil and gas export revenues and escalating defense expenditures. This potential exit fee is part of a broader pattern of increased taxation within Russia, including a VAT increase from 20% to 22% in January, higher corporate tax rates, and a new progressive personal income tax system replacing the previous flat 13% rate. Economic analysts contend these fiscal measures disproportionately burden ordinary Russian citizens.
Read at London Business News | Londonlovesbusiness.com
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