The Daily Populous Sunday October 5th, 2025 morning edition
Authored by pravda.com.ua and submitted by Aine_Ellsechs

Forecasts indicate that the tax increases planned by the Russian government for 2026 to fund its war against Ukraine will accelerate inflation.

Source: The Moscow Times, an independent Amsterdam-based news outlet

Details: Aleksei Zabotkin, Deputy Governor of the Russian Central Bank, said that increasing value-added tax (VAT) to 22% in 2026 is expected to add 0.6-0.7 percentage points to the consumer price index. VAT is Russia's main turnover tax and is included in the price of almost all goods and services.

"This is my personal expectation at the moment. We will adjust as the data comes in," Zabotkin said. He added that final prices would depend on how far businesses decide to pass on higher tax costs to consumers.

Annual inflation in Russia slowed to 8% in late September after a two-year record high of 10.3% in March, according to Russia's Federal State Statistics Service (Rosstat).

The rate of price growth will fall to 6.8% by the end of the year, Russia's Ministry of Economic Development predicts.

In addition to raising VAT, the authorities are preparing a radical tax reform for small businesses. The threshold for the simplified taxation system (STS), which allows businesses to operate without paying VAT, will be lowered from RUB 60 million (around US$729,000) in annual revenue to RUB 10 million (US$241,000).

There are also plans to abolish tax breaks for IT companies, which currently pay insurance contributions at a reduced rate of 7.6%.

This year, the Russian government has carried out the largest tax reform in a decade: income tax has been increased, a differentiated personal income tax scale has been introduced and customs duties and excise taxes, including on fuel, have been raised.

However, The Moscow Times reports that this will not suffice for the budget, which next year must spend 30% on the armed forces and nearly 40% on all law enforcement agencies in Russia. Oil and gas revenues have dropped by 20%, and the Ministry of Finance estimates the deficit will soar to RUB 5.7 trillion (US$69 billion), almost five times the planned RUB 1.2 trillion (US$24 billion).

Background: In Russia, GDP is projected to grow by just 1% in 2025 and 1.3% in 2026. This updated forecast from the Ministry of Economic Development of the Russian Federation underpins the preparation of next year's budget.

008Zulu on October 4th, 2025 at 20:00 UTC »

The glory days of the Soviet empire are on the horizon, standing in line for a potato and a couple slices of stale bread!

-canucks- on October 4th, 2025 at 19:14 UTC »

Have they tried not waging war?

Psychological_Roof85 on October 4th, 2025 at 18:54 UTC »

"Денег нет но Вы держитесь!" - Medvedev, not sure how exactly to translate, maybe someone will help make it more eloquent . Probably closest would be - "There's no money left but you guys hang in there!"

Edit: he had this as an answer to a pensioner who said she was having trouble affording basics like food and utilities. What a guy. Almost as bad the one time he was telling teachers they should go into business if they don't like their salaries.