-
Russia is considering raising its standard VAT from 20% to 22% to address a widening budget deficit driven by record military spending. Exemptions may apply to essential goods, with a decision expected alongside the 2026 draft budget.
-
The proposed VAT hike could generate roughly 1 trillion rubles annually, about 0.5% of GDP, providing short-term fiscal relief. Economists warn exemptions for socially important goods may have limited impact on protecting households from higher prices.
-
The 2025 proposal echoes the 2019 VAT increase from 18% to 20%, which initially sparked inflation but strengthened state revenues. VAT remains a reliable fiscal tool to sustain budget stability amid spiraling defense costs.
Source: vatcalc.com
Latest Posts in "Russia"
- Russia Considers Raising VAT to 22% Amid War Spending and Budget Deficit Concerns
- Lawmakers Propose Reducing VAT on Essential Goods to Lower Consumer Costs
- Parliament Suggests Lowering VAT on Essential Goods to Ease Consumer Burden
- Russian Government Extends VAT Payment Deadline for Catering Enterprises to December 1, 2025
- Development of Judicial Practice on VAT Deductions for Duty-Free Imported Goods in Russia
