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Russia’s Tax Revenue From Occupied Ukrainian Regions Tops 2023 Levels

Russia collected 118 billion rubles ($1.2 billion) in taxes from occupied Ukrainian territories in January-September 2024, surpassing tax revenues from these regions in all of 2023, the RBC news website reported Wednesday.

Russia said it annexed southern and eastern Ukraine’s Kherson, Zaporizhzhia, Donetsk and Luhansk regions in September 2022 following widely disputed referendums despite not fully controlling any of them.

Donetsk and Luhansk, where Russian-backed separatists were at war with Kyiv for eight years before Moscow’s full-scale invasion, collected more than 80% of the occupied territories’ taxes at 56.7 billion rubles and 38.7 billion rubles, respectively.

Zaporizhzhia and Kherson collected 14.9 billion rubles and 7.9 rubles in taxes each.

The 22% year-on-year increase in tax revenues reflects Russia’s steady integration of the occupied Ukrainian regions into its economic and financial systems, RBC cited tax experts as saying.

But Russia still plans to continue pouring subsidies into the annexed regions after it was projected to spend more than 350 billion rubles ($3.6 billion) there in 2024.

Russia’s recently published draft budget allocates 939.8 billion rubles ($9.68 billion) on the “restoration” of Donetsk, Luhansk, Kherson and Zaporizhzhia from 2025-2027.

Most of this funding, 104.5 billion rubles, will go to the construction and repair of residential buildings, followed by 80 billion rubles on infrastructure repair and maintenance, according to RBC. Another 40 billion rubles will be spent on restoring municipal infrastructure and 30 billion rubles on repairing administrative buildings.

More than 24.7 billion rubles will go to “social support” for those who lost their housing during Russia’s full-scale invasion.

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