New Russian regions collected billions in taxes last year – data

Tax revenues in Russia’s four new regions have continued to grow, with a total of 210 billion rubles ($2.27 billion) raised in 2023 in the Donetsk (DPR) and Lugansk (LPR) People’s Republics, as well as in Kherson and Zaporozhye Regions, according to the Federal Tax Service (FTS).

Konstantin Chekmyshev, Deputy Head of the FTS, told an extended meeting of the Accounts Chamber board this week that tax collection in the DPR and LPR had jumped by 34% compared to 2022, while the tax burden decreased.

The dynamics of tax revenues at the beginning of 2024 also remain positive, according to the FTS, having doubled in January and February in annual terms. Chekmyshev indicated that the tax service is focused on simplifying the legal procedures for businesses entering the new regions.

Russian President Vladimir Putin signed a law last year on the creation of a free economic zone for the new regions, with preferential treatment for investors, as well as tax and non-tax incentives guaranteed within its framework. These are similar to the incentives provided in the free economic zones of Crimea and Sevastopol.

Data shows that 155,000 entrepreneurs are registered in the new Russian regions at the moment, of which 99,000 are small- and medium-sized enterprises (SMEs). According to Chekmyshev, the number of SMEs continues to grow, especially in Zaporozhye and Kherson, as well as in the LPR and DPR.

In September 2022, the Donetsk and Lugansk People’s Republics, as well as the Kherson and Zaporozhye regions, voted to join Russia in a referendum that Ukraine and its Western backers denounced as illegitimate.