Putin spoke about the possible consequences of the VAT increase for the economy

If a decision is made to raise the value added tax (VAT), the Russian economy may receive additional opportunities for development. This was announced on October 2 by Russian President Vladimir Putin at a meeting of the Valdai International Discussion Club.

"All this gives us reason to believe that even if the government decides to raise VAT, which, of course, will also affect economic growth. We understand this, this is an increase in the tax burden, it will affect the economy," the president said.

He noted that the measures would help to find a better balance for macroeconomic decisions, including for the Central Bank and the government, which would provide conditions for further development.

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On September 24, it was reported that the authorities were going to raise the standard VAT rate 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.

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