Russia’s state-owned oil pipeline monopoly Transneft said Tuesday that it will likely be forced to cut investments into major projects after lawmakers passed a bill doubling the company’s corporate tax rate.
Russia’s lower-house State Duma passed legislation Tuesday raising Transneft’s corporate tax from 20% to 40% in 2025-2030. The company said the increase would leave it with only a quarter of its profits for internal use.
“After a thorough analysis of production, economic and geopolitical factors, experts predict an unavoidable and significant reduction in Transneft’s investment program by 2026,” the company said in a statement.
It also warned of a “negative impact” on related industries, particularly the fuel and energy sectors.
Tuesday’s tax hike is part of a broader fiscal reform aimed at boosting state revenue as military spending remains at an all-time high. Russia plans to boost defense spending to 13.2 trillion rubles ($142 billion) in 2025 from 10.4 trillion rubles projected for this year
Transneft, which operates 67,000 kilometers (42,000 miles) of pipelines, proposed increasing tariffs through 2030 to “ensure stable and reliable operation.”
Separately, the company announced a 13.8% hike in oil product transportation fees starting Dec. 6, aligning with similar increases by state-owned Russian Railways.
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