Archive · 18 Sep 2025
Russia Considers VAT Hike to Address Budget Deficit
Russia's government is thinking about raising a tax called VAT to help pay its bills.
VAT is a tax on things people buy.
The government needs more money because of the ongoing war and the need to keep spending.
Even though the economy is still growing, it is growing slower now and prices are still high.
This potential tax increase is a way to reduce the amount of money the government borrows.
Officials are debating whether to raise the VAT or not.
The central bank supports finding ways to bring in money, even through taxes, instead of adding more to the country's deficit.
The Russian government is considering raising the value-added tax (VAT) rate.
The potential VAT increase is being considered for the 2026 budget.
The government is aiming to curb the budget deficit.
The Russian economy is slowing down.
The Central bank supports a tax increase instead of a widening deficit.
- Who
- The Russian government
- What
- Is considering raising the value-added tax (VAT) to address the budget deficit.
- When
- The potential VAT increase is being considered for the 2026 budget.
- Where
- Russia
- Why
- To keep the budget deficit in check and maintain reserves, as the war in Ukraine continues and spending is unlikely to be cut.
- VAT Rate
- Potentially rising to 22% from 20%
- 2026 Budget Deficit
- Likely to be exceeded from original target of 0.9% of GDP
- Federal Budget Revenue from VAT (2024)
- 37%
- Liquid Assets in Fiscal Reserve Fund
- About 4 trillion roubles
- Current Inflation Rate
- Above 8%
- Target Oil Price for Budget Rule
- $60 per barrel