Russian President Vladimir Putin signed a law amending the Tax Code, providing for an increase in VAT from 20 to 22% from January 1, 2026. At the same time, the preferential rate of 10% for socially significant goods remains. The corresponding document was published on the portal for the official publication of legal acts.
The preferential rate will remain for food, medicines and medical products, goods for children, periodicals, books, as well as breeding farm animals. However, it does not include milk-containing products with a milk fat substitute; they will be taxed at a rate of 22%.
Earlier, the Chairman of the Bank of Russia, Elvira Nabiullina, said that increasing VAT to 22% in the medium term will allow better balancing of the Russian budget.
According to the Russian Ministry of Finance, the country’s budget deficit in the first 10 months of the year reached 4.2 trillion rubles (about $51.9 billion) due to increased spending.
Russian budget spending has increased significantly in recent years, mainly due to spending on the defense industry.
Sanctions targeting the Russian energy sector have also led to the country’s significant loss of access to European oil and natural gas markets.