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Russia Proposes VAT Hike to Fund Military Amid Deficit

9/24/2025

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Summary

Story summary

Russia's Finance Ministry proposes raising value-added tax (VAT) from 20% to 22% starting in 2026 to cover a 4.88 trillion ruble deficit.
The increase would fund military spending amid the Ukraine conflict and yield about 1.3 trillion rubles annually.
Analysts expect roughly 1.5% initial inflation rise; inflation stands at 8.2%, complicating the Central Bank's task.

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Story summary

Russia's Finance Ministry proposes raising value-added tax (VAT) from 20% to 22% starting in 2026 to cover a 4.88 trillion ruble deficit.
The increase would fund military spending amid the Ukraine conflict and yield about 1.3 trillion rubles annually.
Analysts expect roughly 1.5% initial inflation rise; inflation stands at 8.2%, complicating the Central Bank's task.