Russia plans to increase value-added tax from 20 to 22 per cent under its draft 2026 budget, a move the Finance Ministry said would help finance the war in Ukraine.
The ministry said defence, security, and support for soldiers and their families remain “strategic priorities,” while pledging that social policy commitments would still be met. A reduced 10 per cent VAT on food, medicines and children’s goods would stay in place.
Military and security spending already makes up about 40 per cent of total expenditure in the 2025 budget. Large state contracts for defence industries and payments to soldiers’ families have fuelled growth in Russia’s war-driven economy, though inflation and strain in civilian sectors are mounting.
The proposal requires parliamentary approval, a process widely regarded as a formality. Russia has been waging a full-scale war against Ukraine for more than three and a half years.
