Overview

• The draft budget raises the value-added tax to 22% from 20% in 2026 while keeping a 10% rate for food, medicines and child-related goods.
• Officials state the additional revenue will finance defense, security and support for soldiers and their families.
• Military and security already account for about 40% of state spending in the 2025 budget, reflecting wartime priorities.
• Oil and gas income fell roughly 20% year on year in the first eight months of 2025, and the deficit reached about 1.9% of GDP through August.
• Economists warn the increase will add to inflation and weigh on growth, the State Duma’s approval is expected to be procedural, and public reaction in Moscow is mixed.