Researchers at The Institue of the Rule of Law at the European University in St. Petersburg later discovered that an accounting error made by Russia's Tax Service grossly overestimated company earnings data reported by RBC. With corrections, they estimated that Russian companies declared 478 trillion rubles ($5.6 trillion) in revenue in 2022.
Russian companies declared more than 1 quadrillion rubles ($15 trillion) in 2022 revenue for the first time in the country's history, the RBC news website reported Tuesday, citing data from the country's tax service.
Revenues totaled 1.26 quadrillion rubles last year, nearly double the 655 trillion rubles ($7.7 trillion) declared in 2021, according to Federal Tax Service statistics.
Russia’s tax service attributed the surge to “the growth of mainly oil and gas companies’ export revenues and the recovery of consumer demand for goods, works and services,” RBC said.
Energy exports accounted for almost two-thirds of Russia’s exports in 2022, up from just over half the previous year, according to tax service data. The value of Russia’s oil, gas, coal and fuel exports increased by 43% to $383.7 billion in 2022.
Experts told RBC that last year's revenue growth was bolstered by the volatility of the ruble, import substitution and the inclusion of previously unaccounted-for revenues.
But despite the surge in revenues, overall company profits grew by a modest 5.9%, from 29.4 trillion rubles ($350 billion) in 2021 to just over 31 trillion rubles in 2022.
And when adjusted for inflation, which last year ran at 11.94% according to Rosstat, then profits technically fell.
Experts said the wide disparity between skyrocketing revenue and plateauing earnings is due to higher production costs caused by Western sanctions.
Company revenues are expected to shrink in 2023 due to production cuts made in response to Western price caps and embargoes on Russian oil and gas, analysts told RBC.