Russia will increase VAT to 22%: billions from social programs will be redirected to the army.

According to inkorr.com: The draft federal budget of Russia for 2026–2028 provides for significant changes in the distribution of state resources. In particular, the government intends to allocate more funds to the military-industrial complex and law enforcement agencies than to social and regional programs. This information was provided by the Foreign Intelligence Service of Ukraine.

Changes in taxation

The government plans to raise the VAT rate from 20% to 22%. This will lead to price increases and additional burdens on businesses. A new taxation system for small and medium-sized enterprises will also be introduced, which involves lowering the annual income threshold for the simplified taxation system and increasing insurance contributions for IT companies. These innovations will take effect from 2026.

In addition, some government programs, such as 'Chemical and Biological Safety', 'Development of the Aviation Industry', and 'Energy Development', will receive less funding. In contrast, expenditures on the 'Development of Electronic and Radioelectronic Industry' program in the interests of the military-industrial complex will increase 4.4 times, reaching $2.2 billion by 2026.

Thus, the draft budget of Russia for the coming years promises significant changes in financial distribution, including an increase in the VAT rate and a decrease in funding for certain programs in favor of the military-industrial complex.

In such circumstances, it is important to monitor the developments in Russian financial policy, as changes in the budget can affect the economic situation in the country. Spending on defense and law enforcement agencies will likely reflect the government's priorities amid rising tensions in the region.