Pro-Kremlin activists hold a portrait of President Vladimir Putin near Red Square on Saturday. AFP
Pro-Kremlin activists hold a portrait of President Vladimir Putin near Red Square on Saturday. AFP
Pro-Kremlin activists hold a portrait of President Vladimir Putin near Red Square on Saturday. AFP
Pro-Kremlin activists hold a portrait of President Vladimir Putin near Red Square on Saturday. AFP

Mutiny could profoundly change Russia's war and politics


Thomas Harding
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  • Arabic

The dynamics of Russian politics and the war in Ukraine may have been profoundly changed by the Wagner Group mutiny.

It was one of the most extraordinary days in Russia's recent history where, had Wagner’s boss Yevgeny Prigozhin not lost his nerve, Moscow could have been in flames and President Vladimir Putin’s rule may have collapsed.

Exactly how Saturday 24 June will affect the Kremlin hierarchy and Ukraine’s front line will become more apparent in the coming days and weeks.

What is immediately apparent is that the Russian leader’s political position has been severely undermined, but the extent of this remains unclear.

There has certainly been an emasculation of the Russian military, with the Wagner Group's 30,000 fighters, including a hard core of 5,000 veterans, having been withdrawn from operations.

These have been among Russia's most effective troops, responsible for the eventual capture of Bakhmut. Their loss as a reserve to block any Ukrainian breakthrough could prove costly.

An inescapable fact that will now dog Mr Putin is that hostile forces got the closest to Moscow since the Nazi invasion in 1941.

That an armoured column was able to travel with near impunity to within 300km of the capital will be seen as a serious failure of the internal security forces, including the Rosgvardia national guard.

The incident added weight to the argument that, with so many troops committed to Ukraine, Russia’s armed forces have very little in reserve.

This could well prove pivotal in Ukraine’s counter-offensive planning, knowing that all they need is a breakthrough, with Russian forces having few resources to stop them.

Yevgeny Prigozhin, the owner of the Wagner Group, leaves Rostov-on-Don. AP
Yevgeny Prigozhin, the owner of the Wagner Group, leaves Rostov-on-Don. AP

Furthermore, frontline morale among Moscow’s troops must have been shaken by events on Saturday, and their questioning of the war’s legitimacy enhanced by Mr Prigozhin’s widely broadcast comments that the invasion was launched to reward Russian generals.

Ukraine’s information operations will look to use the damage to Mr Putin’s reputation to undermine his troops’ confidence in their leaders. The image of Wagner tanks in Rostov-on-Don and armoured columns on the road to Moscow will prove hard to banish.

Putin’s aura

The war was instigated on the orders of one man and has been continued at his command. That Mr Putin’s aura of authority has been so demonstrably challenged is likely to have an impact on the battlefield.

To add further humiliation, Mr Putin was forced to rely on Belarus’ President Alexander Lukashenko, who took a direct hand in persuading Mr Prigozhin to stop his advance on Moscow.

But it is still early days, and the situation remains complex. Laurie Bristow, a former British diplomat in Russia, has suggested that there are “several more acts of this to play out”.

“One of the things that we're all struggling with is trying to make sense of what actually happened in the last 24 hours,” he told the BBC. “We don't understand fully why the Russian response was so weak. This is a Russian crisis made in Russia by the failures of the Russian leadership.”

But the West should not get ahead of itself and assume that Saturday’s events meant that “Mr Putin will be leaving power anytime soon”, he added.

Furthermore, very real danger remains over the transition of power if Mr Putin is removed, particularly with Russia possessing the world largest number of nuclear warheads.

Frontline impact

That the mutiny happened in Rostov, the headquarters and main logistics centre of the war in Ukraine, and that its population welcomed Wagner, will have an impact.

While a reported seven helicopters and aircraft were shot down, allegedly by Wagner, commanders did not, at least, have to pull back their few reserves from Ukraine, after it was rumoured that Russian paratroopers were being readied to be sent to defend Moscow.

But Ukraine did also appear to take some advantage of the chaos, making advances to a village within 14 kilometres of Donetsk.

Wagner tanks leave Rostov on Saturday night. EPA
Wagner tanks leave Rostov on Saturday night. EPA

The friction already present within Russia’s high command could well worsen. There will also now be political difficulties in mobilising more conscripts for the next year of war.

“Who would want to fight on for a Russian regime which has shown such weakness, declaring a mutiny and then rowing back within the day?” said John Foreman, a former British defence attaché in Moscow.

Independent political analyst Konstantin Kalachev suggested there was now a “crisis in trust” in Russia’s institutions.

“Putin’s position is weakened,” he told AFP. “Putin underestimated Prigozhin, just as he underestimated Zelenskyy before that."

"He could have stopped this with a phone call to Prigozhin, but he did not.”

Putin positives

One positive for Mr Putin will be that, for now, the Ministry of Defence will no longer suffer the bitter criticism that Mr Prigozhin has levelled at its commanders for the last four months.

Questions remain over whether the deal struck on Saturday will lead to the removal of Defence Minister Sergei Shoigu and armed forces chief Gen Valery Gerasimov.

But given that the Russian military has proved ineffective under their command, a younger, more vibrant leadership could energise its campaign.

Despite Saturday’s disorder, Russia still managed to carry out its biggest strike in months, sending 53 cruise missiles into Kyiv and elsewhere.

During his 23-year reign, Mr Putin has faced challenges to his power before, but nothing as grave as the Wagner mutiny.

Having overcome the challenge, his strategy will likely be to refocus on Ukraine in the hope that Kyiv’s current offensive will founder.

If that happens, the West’s support could weaken, more so if the US elects a new president next year.

Mr Putin will continue to play the long game, hoping for victory in Ukraine. But his future could well be determined by the "securocrats" and oligarchs who cement his authority, and whose confidence in his leadership could now have been undermined to the point of change.

Under such circumstances, he may be scapegoated for the war, prompting rapid regime change with the potential of an ultra-nationalist leader taking his place.

What is clear is that 24 June 2023 could well prove a pivotal day in the history of Russia.

Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

Cricket World Cup League Two

Oman, UAE, Namibia

Al Amerat, Muscat

 

Results

Oman beat UAE by five wickets

UAE beat Namibia by eight runs

 

Fixtures

Wednesday January 8 –Oman v Namibia

Thursday January 9 – Oman v UAE

Saturday January 11 – UAE v Namibia

Sunday January 12 – Oman v Namibia

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Khalfan Mubarak
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The Al Wahda forward is revered by teammates and a key contributor to the squad. At 35, his best days are behind him, but Matar is incredibly experienced and an example to his colleagues. His ability to cope with tournament football is a concern, though, despite Matar beginning the season well. Not a like-for-like replacement, although the system could be adjusted to suit.

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Updated: June 26, 2023, 5:35 AM