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Russia Proposes VAT Hike to Fund Military Spending

9/26/2025

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Story summary
  • Russia's Finance Ministry proposed raising the value-added tax from 20% to 22% from 2026 to fund military spending, contradicting Putin's pledge against major tax changes until 2030.
  • The plan would raise about 1 trillion rubles annually, with military and security spending at 40% of the federal budget.
  • Analysts warn inflation could rise by about 1.5 percentage points.