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Russia is weighing a VAT increase from 20% to 22% to curb its growing budget deficit, despite President Putin’s earlier pledge of no major tax hikes until 2030.
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The hike, potentially effective in 2026, could halve the projected deficit, as VAT already provides 37% of federal revenues. Spending cuts are seen as politically and economically unfeasible.
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Inflation remains above 8%, GDP growth is slowing, and with high military costs, central bank officials cautiously back higher taxes to limit deficits, despite risks of fueling inflation further.
Source: tvpworld.com
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