Overview

• Moscow proposes raising value-added tax from 20% to 22%, with officials saying the increase finances defence and security.
• The plan widens VAT liability to many self-employed and small firms with annual turnover above about €100,000, reversing an exemption that applied below roughly €600,000.
• Tax relief for the tech sector would be rolled back, including ending VAT exemptions on domestic software and lifting social insurance rates for IT companies to 15% from 7.6%, while some other benefits remain.
• Draft documents point to defence outlays of about 13 trillion rubles in 2026 with most military spending classified, and separate filings note 30 billion rubles in new capital for defence-linked lender PSB.
• The budget outlines roughly €441 billion in spending against €411 billion in revenue for a deficit near €30 billion, alongside planned 10% household energy price increases and higher alcohol and tobacco excises that economists warn could stoke inflation before the Oct. 22 Duma review.