The Russian Ministry of Finance has prepared draft laws that provide for an increase in the VAT rate from 20% to 22% from January 1, 2026. The department noted that the purpose of the increase is "financing defense and security," that is, additional funds from the budget will be directed to the war against Ukraine.
Points of attention
- Russia is increasing VAT to 22% to finance the war against Ukraine, leading to a record budget deficit and putting a strain on the population.
- Putin's strategy involves using the population's resources through raising taxes to continue the war, despite statements about negotiations.
- The government's approach highlights the prioritization of war funding over the well-being of ordinary Russians, with the aim to sustain the conflict.
- Sanctions, falling revenues, and mounting war costs are driving Russia to seek additional funds, impacting the country's budget and financial stability.
Russia to raise VAT to continue financing war
Vast war costs, sanctions and falling oil and gas revenues continue to eat into Russia's budget, with a record deficit of 14 trillion rubles (over $160 billion) this year and rising.
This is reported by the Center for Countering Disinformation.
Despite Putin's statements about his readiness for negotiations, in reality the Kremlin plans to continue the war, and the lack of funds for this will be compensated for at the expense of ordinary Russians. Earlier, the Russian government has already increased income tax and personal income tax to this end.
Such actions by the Russian authorities have once again proven that Putin will fight as long as he finds money for the war, even at the cost of a decline in the living standards of Russians. The only way to stop the war is to deprive Putin of all opportunities to finance it.
