Russia will raise its value-added tax rate to 22%, an indication the Ukraine war is dragging on its economy.
President Vladimir Putin had pledged not to raise taxes before 2030, but spiraling military and security expenditure — and reduced income from oil thanks to sanctions and Ukrainian drone attacks on refineries — have hit Moscow’s exchequer.
US President Donald Trump said this week that Russia was in “big financial trouble,” which Moscow dismissed, but the budget deficit is expected to reach 2.6% for the full year, against an expected shortfall of 0.5%. Economic growth is also slowing, with official forecasts falling from 2.5% to 1% for this year.