Abstract <p>The state plays a decisive role in ensuring stable operating conditions for Russia’s coal sector, therefore, the debate over the advisability of its support measures must be grounded in an analysis of the sector’s fiscal efficiency. Budget revenues from the coal sector include tax receipts, insurance premiums, and customs duties. The diversion of budget funds is associated with the costs of restructuring the coal industry, as well as the application of special terms for the rail transport of coal. From the perspective of its operational balance of revenue and expenditures, the coal sector is efficient: over the past decade, it has provided a net contribution to the budget of approximately 1.3 trillion rubles. The multiyear average scale of budgetary allocations required to support the coal sector is less than 7% of the budget revenues it generates. Approximately 60% of these revenues are channeled directly to the budgets of coal-producing regions, reducing their need for interbudgetary transfers. However, the tax efficiency—measured as the ratio of taxes paid to revenue—of the coal sector is among the lowest in the entire Russian economy. Consequently, while the Russian budget system has a clear interest in maintaining the coal sector’s operations, efforts aimed at fostering the conditions for its extensive growth are fiscally irrational.</p>