Kremlin to raise taxes on citizens to keep funding war in Ukraine
Illustrative photo: Kremlin to raise taxes on citizens to continue funding the war in Ukraine (Getty Images)
Russia is launching a new wave of tax pressure on its citizens and businesses aimed at compensating for the depletion of the state budget amid the ongoing war. The tax increases will affect nearly everyone, reflecting the Kremlin’s priorities, channeling resources toward military spending at the expense of social programs, according to the Center for Countering Disinformation.
Rising VAT and reduced benefits
Finance Minister Anton Siluanov announced that in 2026, the Russian government plans to collect an additional 2.3 trillion rubles (about $27.4 billion) through fiscal tightening. The key measure will be raising the VAT rate from 20% to 22%, which is expected to drive up prices for goods and services across the country.
At the same time, the Kremlin is cutting tax benefits for IT companies and restricting opportunities for small businesses operating under simplified taxation systems.
Military spending and social strain
These steps signal that Russia’s budget resources for waging war against Ukraine are being depleted. The military and security sectors consume nearly 40% of the federal budget, and this share is expected to remain high next year. Meanwhile, social programs are being slashed, while the tax burden on citizens and businesses continues to grow, further straining the economy and lowering living standards.
Economic and social consequences
Higher taxes and reduced business incentives are creating new pressure on the economy. Small enterprises face tighter restrictions, the IT sector loses competitiveness, and ordinary Russians are forced to pay more for everyday goods and services. Analysts note that this policy underscores the Kremlin’s prioritization of war over social welfare, deepening economic instability across the country.
For comparison, in Ukraine’s Dnipropetrovsk region, Russian forces continue to suffer significant manpower losses. According to the DeepState project and Andrii Kovalenko, head of Ukraine’s Center for Countering Disinformation, Ukrainian assault units recently liberated four villages, reflecting an escalation in fighting and increasing risks for Russian troops.
In 2026, Russia plans to double its spending on state propaganda, allocating 106.4 billion rubles (about $1.27 billion) for entertainment and pro-Kremlin TV networks, a 54% increase over initial plans, surpassing even this year’s record media budget.
