Western firms reportedly paid at least $46 billion in taxes to Russia amid full-scale war in Ukraine

Western companies have paid at least 40 billion euros ($46 billion) in taxes to Russia over the past three years, according to an investigation by investigative outlet Follow the Money published on June 10.

This figure represents almost one-third of Russia’s defense budget for 2025.

Seventeen of the 20 largest foreign corporate taxpayers in Russia come from G7 and EU countries, Ukraine’s main international supporters, the investigative outlet wrote, citing an earlier report by the Kyiv School of Economics (KSE) and the B4Ukraine association.

Foreign firms still operating in Russia represent a crucial lifeline for Russia’s war chest amid Western sanctions and skyrocketing war expenditures.

Earlier reports by KSE said that only 472 of over 4,000 foreign companies have withdrawn from Russia after the outbreak of the full-scale war in Ukraine in 2022, while 1,360 have scaled down their operations.

Austrian bank Raiffeisen remains the largest European payer of corporate taxes in Russia, with 457 million euros ($522 million) paid only in 2023. In total, U.S. companies generated the greatest revenues for Russia, followed by German commercial entities.

Philip Morris tobacco company, PepsiCo, UniCredit Bank, Mars, and other Western business giants have also continued filling Russian coffers, even though Western governments have donated some $170 billion in military aid to Ukraine to face Russian aggression, according to the investigation.

The firms provided various explanations for their continued presence in Russia. Some argued that their products are essential for Russian consumers, while others cited concern for the safety of their employees, the outlet reported.

Follow the Money also noted that Russia makes it difficult for companies to exit its market, for example, by allowing them to sell their assets only at extremely low prices. Russia has also previously directly seized assets of some companies that had remained in the country.

Companies that have decided to leave the market reportedly had to pay over $170 billion in write-offs and exit taxes.

Russian President Vladimir Putin called for punitive action against Western companies still operating in Russia, saying they must be “strangled” in response to what he described as Western attempts to suffocate the Russian economy.

Despite the rhetoric, Russia continues to explore paths for re-engagement with foreign businesses. In February, Putin instructed his government to prepare for the eventual return of Western firms.

Still, no formal requests have been received from companies seeking re-entry, according to Dmitry Medvedev, deputy chairman of Russia’s Security Council and former president.

Key to Russia’s potential defeat lies in its economy

As the war in Ukraine grinds on, attention remains fixed on the battlefield. But Russia’s most vulnerable flank is not in the trenches — it’s in the treasury. The West, and especially the United States, holds economic levers that could push Vladimir Putin toward serious negotiations or even collapse

The Kyiv IndependentWojciech Jakóbik