Russia is preparing VAT increase to finance the Ukraine War: “Priority is to ensure financial support for defense needs”
The Moscow Ministry of Finance announced on Wednesday, September 24, that it intends to increase, starting next year, the value added tax from 20% to 22%, to cover the military expenses generated by the fourth year of the war against Ukraine.
The new VAT has as a priority objective the financing and security of the country. Photo: AFP
Russian President Vladimir Putin reported last week to be open to tax increases to ensure the financing of the state during war, recalling that the United States increased taxes for very rich citizens during conflicts in Korea and Vietnam, Reuters reports.
The Russian Ministry of Finance states that the new VAT has as a priority objective the financing and security of the country, but that it also takes into account the increase of other taxes, including those applied to companies in the field of gambling.
“The strategic priority is to ensure financial support for the country's defense and security needs and for the social assistance of the families of those who participate in the special military operation”, it is shown in the Ministry's statement.
The institution explains that the additional budgetary resources would allow to be equipped with armed forces with military weapons and equipment, the payment of the wages of the military personnel, the support for its families and the modernization of the companies in the defense industry.
According to the Ministry of Finance, Russia's budget project for 2026 will be “Balanced and sustainable”, Despite the considerable financial efforts imposed by the conflict in Ukraine.
