The Ministry of Finance plans to raise VAT to 22% in 2026

The authorities are going to raise the standard rate of value added tax (VAT) by 2 percentage points, from 20 to 22%, according to the materials of the Ministry of Finance (Izvestia has reviewed them). Changes to the Tax Code are planned to be introduced as part of the budget package. If the amendments are adopted, they will start working as early as January 2026. The adjustments are primarily aimed at balancing the budget in order to fulfill all social obligations.

At the same time, the preferential VAT rate of 10% will remain for socially important goods — food, medicines, medical products and children's goods.

"The VAT increase is designed to balance the budget and will become an important source of income. But at the same time, an additional tax burden falls on enterprises, limiting their investment opportunities," said Anna Fedyunina, Associate Professor at the Department of Applied Economics at the Faculty of Economic Sciences at the National Research University Higher School of Economics.

Economist Andrey Barkhota expressed the opinion that the increase in the tax burden is due to the tense situation in state finances. According to him, for the first time in many years, the budget expenditure plan for the first half of the year has been fully implemented, whereas before it was 80-90%. This indicates that the deficit will not only persist until the end of the year, but is also likely to increase.

"At the same time, this measure will increase the tax revenues of the budget, which is the most stable source of revenue. A 2 percentage point increase in the VAT rate can bring in an additional 600 billion rubles per year while maintaining current business activity and retail sales," Andrei Barkhota estimated.

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Russian President Vladimir Putin said at a meeting with leaders of parliamentary factions on September 18 that the idea of a luxury tax was reasonable, but in this case it was important "not to overdo it." According to him, this is done in some foreign countries, including the United States.

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