Overview

• The Finance Ministry proposed raising the value-added tax from 20% to 22% in the 2026 draft budget to support military spending and benefits for soldiers and their families.
• Military and security already account for roughly 40% of state outlays in the 2025 budget, according to reported estimates.
• A 10% VAT rate would continue to apply to food, medicines and child-related goods, though most purchases would become more expensive for consumers.
• The budget still requires State Duma approval, a step widely described as a formality in Russia.
• Officials flagged additional revenue measures, including higher taxes on gambling, as the civilian economy shows strain and inflation pressures households.