As all week I invitation you to the latest subjective list of top 10 information from Russia. Today's ranking again dominated by the Russian government's search for money and state pride will besides have a sharp emergence in prices in the IT sector and steel products. On the podium, however, a gap in the vault, a trade ban with Russia and a peculiar criminal prosecution group that violates sanctions.
Here we go!
Place 10 of RBI stays in Russia?
A high-ranking US sanction officer met with Raiffeisen Bank global representatives in Vienna this week to discuss the lending activities in Russia and stressed the importance of full control and maintenance of open payment channels for any transactions, informed the US embassy in Austria on Friday.
The Austrian RBI is the largest western bank presently moving business with Moscow, but is under expanding force from European officials and investors to retreat it from the market.
In January, the US Sanctions Office launched an investigation into Raiffeisen in connection with his Russian-related activities. However, the message made by the embassy on Friday on the visit of the Deputy Secretary of the Treasury for terrorism and financial intelligence, Brian Nelson, it sounded more calm.
"(Nelson) has met respective European banks and businesses doing business with the Russian Federation, including the Austrian bank Raiffeisen, to proceed tightening up global sanctions", says a diplomatic mission statement.
. Place 9 One-off charge on past profits
The largest disposable profit taxation for the years 2021-2022, according to available data, will be paid by Sbierbank, Norilsk Nickel and NLMK. This data was provided by Denis Sverchkov, CEO of Green Light Management, at the Tax-2023 conference organized by Kommiersant publishing house.
According to Mr Swierczkow's calculations, it will be 20, 4 billion rubles for Sbierbank, Norylsk Nickel – 18, 3 billion rubles, NLMK – 15 billion rubles. In addition, the top 10 contributors will include PhosAgro (12.1 billion rubles), RusAl (0.4 billion rubles), Severstal (9.5 billion rubles), MMK (9.2 billion rubles), VTB (6.8 billion rubles), Polyus (6.3 billion rubles) and PIK (5.3 billion rubles).
Tax on unexpected profits will be the most delicate to RusAgro, who will gotta pay 22% of the profit for 2022. It is followed by metallurgists (MMK – 9.9%, NLMK – 9.6%, RusAl – 7.6%, Severstal – 7.1%), banks (TSC – Tinkoff Group) – 7.6% and Sbierbank – 7.5%), PIK (7.1%) and RusHydro (6.2%). For another payers, the taxation on extraordinary profits will be below 5% of profits for 2022.
"There will be companies that will gotta pay, regardless of the year being unprofitable for them, these are VTB and Polymetal," Denis Sverchkov said.
Let us recall, according to Interfax, a one-off charge on the excess profits of Russian business for the years 2021-2022 will amount to 10% of the excess profit over the amount for the years 2018-2019.
It seems that companies will in any cases be forced to borrow to meet their government obligations.
Place 8 Steel and steel products prices are rising rapidly
A 27% increase in the price of reinforcement steel has been announced since mid-February on April 19 by Deputy Head of the Ministry of Construction Sergey Musicenko during parliamentary hearings in the Federation Council.
According to the Ministry of manufacture and Trade, between October 2022 and February 2023, the cost of reinforcement rods from the maker remained at a fixed price of 35,5 000 rubles per tonne. Unfortunately, in March 2023, reinforcement rods increased by 57% and already cost 55,000 rubles per tonne, reports RBC.
The government, in the context of fresh complaints about rising steel product prices, will not yet hotel to limiting or regulating home steel prices. However, Deputy Prime Minister Andrei Bielousov decided to proceed to monitor prices and recommended the improvement of a price hazard model for steel producers and consumers.
Let us remind the authoritative inflation according to Rosstat in Russia is 3.5%,
Place 7 Export duties on Brent mixture
State pride immediately adopted at second and 3rd reading the Act which sets the work rate for oil exports not from the price of the Russian Urals species, but based on the cost of Brent mixture. The fresh calculation strategy should enter into force on 1 June.
The law states that Brent price (or more specifically North Sea Dated on the North Sea market) minus $204.4 per tonne (that is, US$28 per barrel) will be utilized to calculate the work for June and Brent minus US$182.5 per tonne (25 USD) for July and later. Thus, the rebates will be precisely the same as erstwhile calculating the mining taxation on minerals.
Earlier in Russia, the Act on a fresh methodology for determining the price of Urals oil came into force erstwhile calculating mineral extraction taxes (MET) and additional income from hydrocarbon extraction (AIT). Under the law, erstwhile calculating duties, the discount on Ural is limited. If in April the Ural discount is more than $34 of the average Brent price, then the mineral and income taxation tax are calculated on the basis of the Ural cost with a discount of $34 of Brent, in May the discount will be $31 of Brent.
According to the Ministry of Finance, the average price of Ural in March this year was $47.85 per barrel against $89.05 in March 2022.
Seat 6 Increase in IT costs
In Russia, the cost of external IT support services (outsourcing) increased over the year, marketplace participants estimation its dynamics to 40%, depending on the equipment class and the complexity of its maintenance. But prices this year are shaped not by large integrators, but by fresh tiny companies that find ways to smuggle components into Russia, say experts.
Contract prices, including the supply of equipment components, have increased this year 100%, says Paweł Kułakow, founder of the Oxygen data center network: users must endure a longer waiting time for the support they need, which may take months."
The marketplace in the Russian Federation is now rapidly occupied by tiny companies registered in the CIS or another countries that rise prices, explains Paweł Kułakow, while it was previously divided among the largest integrators: "Small companies have more opportunities to bring in the essential components and customers have no alternative, which besides becomes a driver of price growth".
IT staff salaries rose by 19% in 2023 and is twice as advanced as the average for the economy.
At the end of December last year, the head of the Ministry of Digital Development, Maxut Shadaev, said that about 100,000 IT professionals had left the country.
In order to halt staff leaving the country, the authorities introduced certain preferences for IT professionals. For example, it is simply a preferential mortgage ( 5% per year) and a postponement of partial mobilisation.
Place 5 Sebierbank pays out a historical dividend
Sbierbank shareholders approved a dividend payment for 2022 of 25 rubles per share. On April 21, Russian Finance Minister Anton Siwanov informed about this.
"At the end of last year, we made a decision and the general gathering of shareholders confirmed the anticipation of paying an increased dividend. This indicates the stableness of the largest bank in the Russian Federation – Sbierbank. The General Assembly voted to pay the increased dividend," he said at a press conference after announcing the results of the yearly general shareholders' meeting.
The full payment will be about 565 billion rubles, which is the highest number in bank history.
It will be 2.5 times the profit achieved.
Seat 4 Declining regions' budgets
Russian regions study a sharp decline in taxation recovery, which began in the second half of last year and accelerated in winter.
More than 1 3rd of the entities of the Russian Federation (33 out of 85) reported a decrease in gross to the state Treasury in the last months of 2022, And 5 regions experienced a full income collapse, calculated experts from the Gajdar Institute.
So in the 4th quarter, the region of Tiumen missed all second ruble of taxes: fees fell by 48.9%. The gross of the Krasnojarska region fell by 39%, in the Murmanska region by 33%, Chakasia by 32%, in the Kemerowo region by 30%.
The main origin of problems for regional budgets was the business income tax, said Alexander Deryugin, head of the fiscal policy department of the Gajdar Institute: if in the first half of 2022 his fees increased sharply (+ 45%), then in the second half the decrease began (30%), which accelerated to 40% in the 4th quarter.
At the end of the year, 35 entities of the Russian Federation received a budget deficit, which was nevertheless compensated by the "surplus" of the remaining 50 regions. As a result, the consolidated budget was reduced to a tiny surplus – by 50.6 billion rubles, or 0.3% of full revenue.
W Regional budgets hit sanctions against the largest Russian companies, cutting off metallurgists, miners and the timber manufacture from abroad markets. Given that there is no possible of expanding the collection of another taxes, in 2023 "the budgets of the vast majority of regions will be unsustainable", warns Deryugin.
To avoid this, additional aid from Moscow will be needed, he said. But there's barely any extra money in the national budget, as we know.
We are waiting for data from fresh months but judging by the pleas from regions the situation is beginning to be dramatic and the government's demands to increase taxation collection seem absurd.
Seat 3 Budgetary expenditure has gone out of control
Budget expenditure in the 3rd week of April accelerated to 118 billion rubles a day, which is noticeablely higher than January-March levels.
The Ministry of Finance has spent 10, 2 trillion rubles, according to data from the electronic budget system. The gross on the same day amounted to 5, 373 trillion rubles ($50 billion) . So almost all second ruble issued by the government remained without taxation revenue, and the deficit reached 4.77 trillion rubles, which is 1,6 times higher than the yearly plan.
In little than 3 weeks of the month, the Ministry of Finance spent 2.1 trillion rubles – almost the same as for the full of March (2.3 trillion). At the same time, if in January and February the budget spent about 100 billion rubles a day, in March it slowed to 75 billion, in April this amount jumped to 122 billion rubles.
In mid-April, Deputy Minister of Finance Vladimir Kolychev reported on the stabilisation of budget expenditure in March and their continued uniform usage under the yearly standard following increased expenditure at the beginning of the year,
If this is what stabilisation is expected to look like, you can anticipate that in the following months of the year it can only be worse.
The authorities proceed to disclose the structure of online costs, with crucial limitations on information. On the basis of expenditure figures as at 18 April 2,75 trillion rubles of funds, or 27%, is classified and increasing steadily.
Place 2 full prohibition and ba list in trade with Russia
G7 countries are considering tightening sanctions and introducing a complete ban on exports of almost all goods to Russia, reports Kyodo, citing sources in the nipponese government.
The G7 associate States have already ceased exports to Russia to a wide scope of goods that can be utilized for military purposes. According to Kyoto sources, countries can extend the ban to utilized cars, tyres, cosmetics and clothing.
On the eve of Bloomberg reported that this thought was discussed by G7 representatives on the eve of the May leaders' summit in Japan. According to agency sources, they intend to affect EU countries in its implementation.
According to Bloomberg, exceptions to sanctions are likely to be introduced for medicines and agricultural products.
The ban is to be announced at the G7 summit on 19-21 May. Let us callback that the summit brings together leaders of large Britain, Canada, France, Germany, Italy, Japan and the United States and the European Union. nipponese Prime Minister Fumio Kishida besides invited Ukrainian president Volodymyr Zelenski to participate in the online meeting.
Place 1 American Justice Department begins to prosecute intermediaries
Bad clouds come over companies that aid break sanctions or participate in parallel import.. Not only the Treasury department, but justice is targeting companies breaking sanctions by treating them equally with another national crimes.
Washington will look at the activities of many companies as well as investment advisors, hedge funds, banks, law firms and private property managers who have previously managed to avoid controls to prevent ways of avoiding anti-Russian sanctions, said Andrew Adams, head of the fresh US Department of Justice working group on implementing sanctions against Russia
He announced a change in gravity in the fight against circumvention of sanctions against Russia. In particular, intermediate companies are to be controlled. The working group besides explores ways of utilizing cryptocurrency to mask transactions involving goods subject to sanctions or to make transfers to persons and companies subject to restrictions.
While American and Western European banks are comparatively good at complying with sanctions, Adams said, “there are places in the planet where this culture does not exist”. At the same time, he refused to supply circumstantial companies, people or regions on which investigators would focus.
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