Newsweek: US corporations are Russia’s biggest foreign tax source, paying $ 1.2 billion in 2023

American companies that continue to operate in Russia have contributed more than $1.2 billion in profit taxes to the Kremlin in 2023, Newsweek has learned through exclusive data from campaign group B4Ukraine and the Kyiv School of Economics (KSE) Institute.

Since Russia invaded Ukraine in 2022, companies around the world have left the country to voice their moral opposition to the conflict and to put economic pressure on Vladimir Putin’s regime. However, many remained, continuing to provide substantial financial support through tax payments.

The findings reveal the United States as the largest foreign contributor of profit taxes to Russia, surpassing Germany ($693 million) and Austria ($579 million). According to Yale School of Management’s research, 123 major US companies maintain business operations in Russia. At the same time, KSE Institute’s broader analysis, including mid-size and smaller firms, puts the number at approximately 328.

Among the top tax contributors, Philip Morris International leads with $220 million, followed by PepsiCo ($135 million) and Mars ($99 million). Other significant contributors include Procter & Gamble ($67 million), Mondelez ($62 million), and Citigroup ($53 million).

“It is absolutely shameful that American companies have chosen to stay in Russia and subsidize Putin’s barbaric war in Ukraine,” says Dr. Michael McFaul, former US ambassador to Russia and Stanford University academic, in an interview with Newsweek.

The data shows US companies’ tax payments have increased from $915.7 million in 2021 despite their combined revenues dropping from $50 billion to $30.5 billion in 2023. Companies looking to exit face steep challenges, including a mandatory 15% exit tax and requirements to sell assets at a 50% discount.

When contacted by Newsweek, several companies defended their positions or outlined scaled-back operations. Notably, Mondelez maintained its presence, arguing investors did not “morally care” about continued business in Russia, while Philip Morris International cited potential financial losses as a reason for maintaining operations.

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