Russia's MinFin expects revenue from diamond duty to be negligible, as goal not fiscal

MOSCOW. June 25 (Interfax) - Russian federal budget revenues from the export duty on rough diamonds that is being introduced this September will not be significant, Deputy Finance Minister Alexei Moiseyev said.

"This measure is being introduced not to collect money for the budget, but to protect the Russian [diamond] cutting industry. It has contracted dramatically in the past ten years since the elimination of duties following Russia's accession to the WTO...As for revenues, we tentatively counted, the amount is negligible. For us it's important to support the industry, create incentives for cutting inside the country," Moiseyev told reporters.

The effect for the budget will be negligible because, with the imposition of the duty, a larger share of rough diamonds should to the domestic cutting industry, he said. Furthermore, the duty will not apply to diamonds smaller than 0.45 carats.

In protecting its cutting industry, Russia "is following in the footsteps of African diamond mining countries such as Angola, Namibia and Botswana," Moiseyev said.

Russia is introducing the export duty of 8% on rough diamonds weighing 0.45 to 10.8 carats and rough diamonds of special sizes weighing upwards of 10.8 carats on September 1, 2026.

Alfa Bank estimated that, at the ruble's current exchange rate, the duty could put an additional burden of 3.5 billion rubles on the operating income of diamond miner Russian Alrosa this year alone. This would mean a 16% reduction of the company's anticipated EBITDA, which is already falling year-on-year amid the strong ruble and difficult situation in the sector.

Moiseyev also said the Finance Ministry still does not believe it is advisable for state repository Gokhran to make major diamond purchases from Alrosa, although it is setting aside a fairly large reserve of the annual limit of 50 billion rubles in case the situation on the diamond market worsens.

"We're leaving a fairly substantial reserve in order to intervene on the rough diamond market if needed. We don't see such a necessity at this point. But we have such an option," Moiseyev said.

Gokhran, which in the usual circumstances buys gold and unique precious stones, made negligible purchases in the first half of 2026.

"If the situation on the rough diamond market does not become critical, we will buy gold [before the end of the year]," Moiseyev said.