The Russian Finance Ministry stated on Sept 24 that it was suggesting from 2026 to increase the value-added tax (VAT) rate from 20 percent to 22 percent in an effort to fund military spending in what would be the fourth year of the war in Ukraine.
Russian President Vladimir Putin indicated last week that he would consider increasing some taxes to balance the books while waging war, observing that the United States increased taxes on rich individuals in the Vietnam and Korean wars.
Russia’s Finance Ministry, which indicated that the tax rises will be “primarily directed at financing defence and security”, stated in a release that it was also putting forward other increases in taxation, such as on gambling companies.
“The strategic priority is to offer financial support for the defence and security of the country, and social support for families of participants in the special military operation,” it stated in a release.
“The planned resources in the Budget will ensure that the military is supplied with requisite weapons and equipment, it will enable military personnel to be paid salaries and benefit their families, as well as modernize defence industry complexes.”
The ministry stated the 2026 Budget draft was “balanced and sustainable”.
