Russia economy meltdown as Putin forced into humiliating tax move | World | News
Vladimir Putin has been forced to increase some taxes to finance “defense and security”, as Russia has planned to allocate less funds to the sector next year. The country’s Ministry of Finance, since January 2026, from 20% to 22% value added tax (VAT) increase, as well as 60 million rubles (approximately £ 537,000) to 10 million (approximately 89,000 £), the VAT is a decrease for annual income for enterprises.
Authorities stated that financial changes aim to finance defense and security firstly, the War Research Institute (ISW) Moscow’s daily report on full -scale invasion. Experts claimed that Putin’s Finance Minister Anton Siluanov expected to be about 20% to 22% in 2026, which financed the federal budget of the revenues of Russia’s income of Russia’s income from Russia’s revenues on September 18th – this decrease from approximately 50%.
Isw wrote: “The Kremlin is probably looking for other flow of income flows as oil and gas revenues that Russia trusts to finance its war in Ukraine, and decreases against Western sanctions and Ukrainian strikes that are approaching against Russian oil infrastructure.”
Reuters reported that the documents that have not been published by the Ministry of Finance estimate that the VAT increase will produce approximately 1.2 trillion rubles (about 10.7 billion £) in additional income next year.
Experts believe that Moscow is looking for different ways of providing funding for defense and national security without increasing existing socio-economic tensions.
State media scope and social media campaigns show that “Kremlin is aware of the possibility of social discontent due to the increase in daily goods prices,” he said.
In addition, Russia’s main state television channels stated that VAT has increased “secretly”, only the war in Ukraine, the US President Donald Trump’s speech in the United Nations and the upcoming parliamentary elections in Moldova.
Financial times VAT movement last year Putin’in before 2030 before the hostage to raise the tax reported.
“Kremlin’s priority continues to be military expenditures, and now the main problem for everyone,” he explained former Central Bank official Alexandra Prokopenko, the newspaper at the Carnegie Eurasia Center in Berlin.
“At the beginning of the war, the expenditures on the army came from reserves and excess oil and gas income.
“Then institutions raised taxes. Now all businesses and Russian citizens will finance the war directly, because there are no other sources left.”
