Russian government plans to raise value-added tax (VAT) to 22% in 2026, alongside other tax reforms, are expected to accelerate inflation. Deputy Governor of the Russian Central Bank, Aleksei Zabotkin, anticipates the VAT increase will add 0.6-0.7 percentage points to the consumer price index, as it is Russia’s main turnover tax. The government also plans to lower the threshold for the simplified taxation system (STS) and abolish tax breaks for IT companies. These measures, coupled with existing tax hikes and declining oil and gas revenues, are intended to fund the war against Ukraine and address a soaring budget deficit.
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Ukraine’s Foreign Intelligence Service (SZR) alleges that China has provided Russia with satellite reconnaissance data used to guide missile strikes against targets in Ukraine, including those owned by foreign investors. According to the SZR, this high-level interaction between Russia and China has allowed for the identification and refinement of strategic targets. While specific targets were not detailed, a US-owned electronics factory operated by Flex was destroyed in August, and the SZR noted China’s role in supplying specialized chemicals, gunpowder, and industrial machinery for Russia’s defense sector. The report highlights a significant dependence on Chinese resources, as approximately 80% of critical drone electronics used by Russia originate from China.
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Ukraine’s foreign intelligence service (SZRU) has evidence suggesting China is providing satellite data to Russia, which is being used to target missile strikes on Ukrainian facilities, including those used by foreign companies. SZRU employee Oleh Alexandrov stated there is evidence of high-level cooperation between the two countries in conducting satellite reconnaissance to identify strategic targets. Although no specific details were released, the Ukrainian government alleges that these attacks are a direct result of China’s support for Russia, despite China claiming neutrality in the ongoing war. This information further highlights the complex relationship between China and Russia.
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Denmark’s military intelligence has accused Russian warships of engaging in aggressive actions within the Danish straits connecting the Baltic and North Seas. These actions reportedly included aiming weapons at Danish vessels and helicopters, conducting dangerous maneuvers, and jamming navigation systems. Director Thomas Ahrenkiel presented evidence of these provocations, including the extended presence of a Russian warship in Danish waters, which is viewed as a signal from Moscow. The intelligence also registered Russian ships using sonar and electronic warfare equipment, which is believed to have caused GPS disruptions. The White House has stated it takes the reports of Russian naval provocations seriously and is in contact with NATO allies.
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During his address to the United Nations General Assembly, Ukrainian President Volodymyr Zelenskyy cautioned global leaders about the perilous implications of artificial intelligence, asserting that the world is currently experiencing the most destructive arms race in history. He emphasized the threat posed by the rapid advancement of weapons technology, including AI-powered autonomous systems, and the inadequacy of current global safeguards. Zelenskyy advocated for the establishment of international regulations governing the use of AI, highlighting the potential for AI-driven drones to autonomously target infrastructure and individuals. He further underscored the ease with which dangerous weapons can be accessed and deployed, particularly in the context of the ongoing war in Ukraine.
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Following the completion of upgrades, the Czech Army plans to donate 30 modernized T-72M4CZ tanks and recovery vehicles to Ukraine. The upgrades, which include improved engines, fire control systems, and enhanced armor, will bolster Ukraine’s armored forces. This move will strengthen Ukraine’s capabilities, particularly against Russian T-72B3s and T-80s. The donation also allows the Czech Republic to support Ukraine while transitioning to a Leopard-based armored corps.
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Ukrainian Special Operations Forces successfully struck the Russian small missile ship “Grad” in Lake Onega, Republic of Karelia on October 4th. The strike targeted the right section of the ship’s engine compartment. The “Grad,” commissioned in December 2022, was en route from the Baltic Sea to the Caspian Sea and is equipped with the Kalibr-NK missile system. This operation followed other strikes on Russian facilities reported by the General Staff of Ukraine.
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Polish prosecutors are investigating a suspected Russian plot involving the smuggling of explosive-filled food cans into the country. A Ukrainian suspect, allegedly linked to Russia’s GRU, transported the cans from Lithuania and left them near Łódź. The GRU reportedly planned to use the explosives in sabotage operations in Poland, Lithuania, and Germany, potentially attaching them to drones. Investigators have not revealed the motive, but Poland’s support for Ukraine and its large refugee population are potential factors.
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Overnight on October 4, a drone attack ignited a fire at an oil refinery in Kirishi, Russia, which was confirmed by regional officials. Local reports and photos indicated an explosion and flames at the facility, identified by sources as one of Russia’s largest, opened in 2017. This marks at least the fourth time the refinery has been targeted, with previous attacks attributed to Ukraine, although there has been no immediate comment on this instance. Ukrainian forces have increasingly targeted Russia’s oil industry, viewing refineries as legitimate military targets supporting the ongoing conflict.
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President Volodymyr Zelenskyy recently addressed the nation, highlighting successful strikes against Russian logistics and fuel infrastructure. These targeted attacks have resulted in Russia importing petrol from various sources, including Asia and Belarus. Zelenskyy attributed these outcomes to the work of the Ukrainian Security Service, Armed Forces, intelligence agencies, and domestic weapons manufacturers. He also announced plans to increase long-range capabilities and prepare new sanctions in collaboration with international partners, specifically targeting individuals and companies supporting the Russian defense industry.
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John Q. Hosedrinker