Russia’s Central Bank Warns of Rising Prices Amidst New Taxes and Economic Strain
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.
John Q. Hosedrinker