Russia: FinMin wants to shift fuel excise tax hike proceeds to federal budget

The FinMin plans to transfer revenues from the additional fuel excise tax to the federal budget, it became clear from the latest proposed amendments to the budget code. We remind that the government approved the increase of the excise tax on fuels by RUB 2 per litter from Apr 1. The FinMin wants to collect the additional revenue and leave 77% of the excise duty proceeds with regional road funds (presently getting 100% of fuel excise tax revenues). The remaining 23% of the funds will be transferred to the federal road fund, according to the proposal. The FinMin projects additional revenue from the excise duty hike to amount to RUB 70.7bn in 2016 (revised down from RUB 89bn). The federal budget will, thus, receive RUB 68.5bn from the additional revenue in 2016 and RUB 80.9bn in 2017. The proposed amendments have still not gone through government discussions and changes are possible, although the amendments are in line with govt policy to consolidate budget revenue and increase control over regional spending.

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