The State Duma of Russia has approved an increase in VAT from 20% to 22% starting from 2026, hoping that this decision will bring 12.3 billion dollars to the budget. The changes also reduce the annual income threshold for businesses that must collect VAT from 739,000 dollars to 123,000 dollars, according to unn.ua.
Against the backdrop of Russia’s full invasion of Ukraine, which has been ongoing for nearly four years, Moscow is looking for new sources of income to boost its economy. On Tuesday, the State Duma of the Russian Federation introduced significant changes to the value-added tax (VAT), which will come into effect in 2026.
In the Russian Federation, a new tax increase has been approved: in the second reading (before which the main changes to the document are made), a bill on tax changes, including an increase in VAT from 20% to 22% (excluding a line of goods with social significance), was approved.
The new changes are expected to add approximately 12.3 billion dollars to the Russian state budget.
The new legislation lowers the threshold for businesses required to collect VAT: from about 739,000 dollars in annual sales revenue to about 123,000 dollars.