 "Putin turns to oligarchs for budget support as Ukraine war strains Russia’s finances")
Russian President Vladimir Putin has urged oligarchs to donate money to the defence budget so it can feed the war machine in Ukraine amid strained finances.
According to a report by the Financial Times, the Russian president made the comments to a large group of businessmen on Thursday, showing that he does not intend to end the war in Ukraine.
Despite considerable financial instability, Putin said that Russia would continue to fight until it captures the remaining areas of Ukraine’s eastern Donbas region that are not under its control.
The Russian leader had backed what he saw as a compromise proposal to turn the Donbas into a “demilitarised zone” or a US-backed “special economic zone,” but abandoned the idea after Ukraine made clear that giving up the region was a red line, one source told FT.
How is Russia meeting the budget shortfall?
Putin’s request to oligarchs is the latest in his bid to increase Russia’s defence budget, as Moscow barely manages to keep up with finances. This is, however, the first time Putin has reached out to business tycoons himself.
In January, the Kremlin raised VAT by two percentage points to 22 per cent in an effort to generate an additional Rbs600bn ($7.4bn) over three years from small and medium-sized businesses. Russia had also collected Rbs320bn in 2023 through a one-off 10 per cent windfall tax on certain large companies.
Meanwhile, Russia’s Economy Minister Maxim Reshetnikov said on Thursday that the country is considering another windfall tax this year if the rouble continues to weaken.
Businessmen extend helping hands
At least two businessmen told Vladimir Putin they were willing to make voluntary contributions to support the budget.
Among them, oligarch Suleiman Kerimov, reportedly linked to the recent controversial takeover of leading online retailer Wildberries, said he was prepared to contribute Rbs100bn, the sources said.
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View AllMetals magnate Oleg Deripaska also agreed to contribute when asked.
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