Starting in 2026, Russia will increase VAT from 20% to 22% to finance the war in Ukraine

Starting in 2026, Russia will increase the value-added tax (VAT) from 20% to 22%, a measure intended to support the financing of the war in Ukraine. This increase could bring approximately 1.187 trillion rubles to the state budget, equivalent to 15 billion dollars. The decision, approved last year, has generated criticism from the business environment and consumers, who are already facing high inflation and increased spending in the defense sector. President Vladimir Putin justified the VAT increase as necessary for balancing the national budget, while also promising a reduction in the tax burden in the future. The Ministry of Finance assured that social commitments and those in the defense sector will be respected, despite the tax increase.