Russia plans to raise its value-added tax (VAT) in a bid to shore up finances for the ongoing war in Ukraine, the Finance Ministry announced on Wednesday.
According to the draft 2026 budget, the VAT rate would climb to 22 per cent from the current 20 per cent.
The government assured that it would continue to meet social policy obligations, but stressed that defence, security, and support for soldiers and their families remain “strategic priorities.”
Military and security spending already makes up around 40 per cent of total government expenditure in the 2025 budget, official estimates show.
Large state orders for the defence sector and generous payouts to soldiers and their families have bolstered Russia’s war-driven economy. However, pressure is mounting on civilian industries, with inflation increasingly squeezing household budgets.
The Finance Ministry noted that the reduced 10 per cent VAT rate on food, medicines, and children’s goods would remain unchanged.
President Vladimir Putin has been waging a full-scale war against neighbouring Ukraine for more than three and a half years, with no end in sight.
The budget proposal will still need parliamentary approval, a step widely regarded as a formality in Russia.
