Despite threats and promises of leaving Russia after the invasion of Ukraine last year, Western companies still made nearly $214 billion in revenues in Russia, generating billions of profit taxes that fund Putin’s war chest, according to a new report published by the non-profit B4Ukraine and the Kyiv School of Economics (KSE) on Tuesday, July 4th.
The report, titled “The Business of Staying” provides a detailed look into which multinational companies and which countries are the ones that remain the most responsible for providing foreign revenue to Moscow, “further enabling Russia’s war of aggression.”
The authors of the report examined 1,287 Western companies with Russian subsidiaries at the start of the full-scale invasion, out of which only 241 (17%) have fully left Russia, while the majority (56%) are committed to remaining and continuing their business in the country.
The companies made over $213.9 billion in revenues through their Russian branches in 2022, paying $3.5 billion in profit taxes. This is only the tip of the iceberg, the report notes, as it doesn’t account for their employees’ income tax, social insurance payments, and VAT, leading to “a substantial underestimate of the total tax bill.”
What further adds to the underlying hypocrisy is that a quarter of all the profit taxes was paid by companies headquartered in G7 countries and that U.S.-based corporations generated more revenue and paid more taxes than any other country.
Out of the $3 billion in profit taxes, U.S. companies paid $712 million alone, followed by Germany with $402 million, and Switzerland with $275 million. Japanese and British companies paid over $200 million in profit taxes as well, while the French and Dutch also surpassed the $100 million threshold each.
The American tobacco giant Philip Morris is leading the revenue list for 2022 by earning nearly $7.9 billion alone, with Pepsi and British American Tobacco also being among the top five. From France, Leroy Merlin, Auchan, and Danone are all in the top ten, followed by Germany’s Metro and Uniper as well as the South Korean Hyundai and Samsung.
Interestingly, several companies who have explicitly pledged to leave Russia are also on the top 20 list, including the Dutch VEON, the Danish Carlsberg, and perhaps the Kremlin’s loudest corporate critic in Sweden, IKEA.
“It should be crystal clear now,” the authors write in their press release, “all Western companies that have not left the Russian market since the full-scale invasion of Ukraine began 16 months ago are complicit in the Putin regime’s war crimes and crimes against humanity.”
Therefore, B4Ukraine calls on the Biden administration and other governments to step in and take the initiative in encouraging their companies to actually leave the country, by informing them “of the heightened risk associated with doing business in Russia.”
