Russia raises taxes and expands the circle of taxpayers, expecting funds for military spending

Against the backdrop of Russia’s almost four-year full-scale invasion of Ukraine, Moscow is looking for new sources of income to stimulate its economy. Today, the State Duma of the Russian Federation introduced significant changes to the value-added tax (VAT), which will come into force in 2026. UNN reports with reference to the Associated Press.

DetailsIn the Russian Federation, a new tax increase has been approved: in the second reading (before which the main changes are made to the document), a bill on tax changes, including an increase in VAT from 20% to 22% (excluding a line of socially significant goods), has been approved.

The new changes are expected to add a trillion rubles (about 12.3 billion dollars) to the Russian state budget.

According to AP, the new legislation lowers the threshold for businesses required to charge VAT: from 60 million rubles (about $739,000) in annual sales revenue to 10 million rubles (about $123,000).

It was previously reported that taxes in Russia will increase from 2026, as in September, the Ministry of Finance of the Russian Federation included an increase in value-added tax (VAT) in the draft budget for 2026 and the planning period of 2027-2028.

Expenditures on the armed forces of the occupying country will remain the largest item in the Russian budget. In 2026, defense spending will amount to more than 12 trillion rubles, or almost 30% of all Russian budget expenditures.

RecallRussia “may be forced to take measures to ensure security,” warned Putin’s press secretary Dmitry Peskov, commenting on the forecast of German Defense Minister Boris Pistorius that Moscow is capable of inflicting a Russian military strike on the territory of NATO countries by 2028-29.

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