According to the report “Supporters of Russia’s war in Ukraine”, published on Monday, the 13th of January, by two NGOs B4Ukraine and Squeezing Putin and the Kyiv School of Economics Institute (KSEI), the Kremlin earned around three billion euros in taxes in 2023 from European Union (EU) companies only that operated and some of which still operate in Russia, reports Politico.
Foreign companies in Russia are a major contributor to the Kremlin’s war chest as they continue to sell non-sanctioned goods such as food, tobacco and clothing.
Including both companies from countries supporting Ukraine and direct supporters of Russia’s war, the total amount collected in taxes by the Kremlin is 21.6 billion US dollars (21.2 billion euros) by 2023.
Tobacco giant Philip Morris is the biggest foreign earner in Russia. The KSEI estimated that the Marlboro cigarette producer generated revenues of almost seven billion US dollars in Russia in 2023. The company paid 208 million euro in taxes, up 144 million euro on the previous year.
While most Western companies are ready to leave or have already left the country, several hundred companies have remained in Russia since Russia went to war in Ukraine in 2022. Lufthansa Technik and Carlsberg withdrew from the Russian market at the end of 2023.
Of the 1 600 companies examined by the researchers, more than 900 are from G7 countries, all of which support Ukraine politically, financially and militarily.
“930 G7 and EU companies were the largest taxpayers in Russia, and 16 of the top 20 taxpayers came from these countries,” the report says.
Looking at the EU alone, the report lists no less than 827 companies. Together they “earned 81.4 billion US dollars (79 billion euros), down from 111.4 billion US dollars in 2022, while their income tax payments remained unchanged at three billion US dollars,” the report said.
France’s Mulliez family also remains heavily linked to Russia. Its retail properties Leroy Merlin and supermarket chain Auchan are ranked 3rd and 7th in terms of revenue in Russia in 2023. A spokesperson for Leroy Merlin said that the holding company ADEO has transferred ownership of its Russian branch to local management at the end of 2023.
Among the top 20 earners in Russia are food conglomerates such as Nestlé, Mars and Pepsi, as well as German retailers Metro and Globus.
Chinese companies include automotive players such as Haval and its owner Great Wall Motors, as well as Chery, Volvo owner Geely, FAW and Changan.
This year, corporate income tax in Russia will rise from 20% to 25%, meaning that tax payments by Western companies could increase further.