On February 24, 2022, in a message at midnight, the president of Russia, Vladimir Putin, announced the beginning of one in Ukrainian territory. That euphemism has ended up becoming a war that lasts three and a half yearsand what is leaving very touched the Russian economy.
The costs of the armed conflict They have been financed by Russia Thanks to refined products, and Income from the National Social Welfare Fund (accumulated for years thanks to the large amount of money obtained through oil and gas exports).
However, the extension in the time of a war that initially the Kremlin expected it to last weeks or at most months has ended up wreaking Russian finances. This is forcing Putin to adopt measures with which to give the country’s accounts again.
In that sense, the Russian president has announced a Tax rise to finance the war in Ukraine. The Ministry of Finance has announced a Increase in Value Added Tax (VAT) of two percentage points, reaching 22%. The decision makes sense from the purely economic point of view, since that tax were more than 15% of Kremlin’s total income in 2024.
As you remember , Russia has already considerably uploaded the Income Tax of natural persons (IRPF) at the beginning of this year. In fact, Putin promised not to make new important modifications in the tax system until 2030. But he has breached his promise.
And those of the increase in VAT and IRPF are not the only measures that the Ministry of Finance proposes to increase tax revenues. It also intends Include smaller and medium enterprises in the tax network reducing the annual income limit for the tax declaration from the 60 million rules current to 10 million rubles (about 102,000 euros, to the current change).
From the Ministry of Finance themselves have recognized that These tax increases “have the main objective to finance defense and security”or what is the same, continue to financially support war against Ukraine.
