Analysts predict an increase in VAT in Russia to 22% by 2026
The new level of value-added tax planned in Russia will bring the country into the top 20 states by this indicator, equating it with Uruguay. The increase is expected to lead to rising prices, experts forecast.
The VAT reform, which envisions raising the rate to 22% by 2026, positions Russia as a leader among countries outside the European Union in terms of this tax level. Meanwhile, within the EU, only a few countries have higher rates, such as Hungary with 27% and Denmark and Sweden with 25%. Major economies in the union, such as France and Germany, maintain VAT at 20% and 19%, respectively.
Despite the Russian Ministry of Finance’s intentions to collect an additional 1.4 trillion rubles, experts at the Gaidar Institute warn of possible negative consequences of the increase. It may cause a short-term rise in consumer prices, a decrease in demand, and lowered purchasing power. The budget, according to forecasts, risks losing about 600 billion rubles.
Russian economists believe such measures may lead to a “tax spiral,” and as a result, the government might have to raise taxes again. This occurs against the backdrop of a slowing Russian economy, which has been showing a decline in industrial activity and reduced corporate profits for several months.
| Country | VAT Rate (%) |
|---|---|
| Hungary | 27% |
| Denmark | 25% |
| Sweden | 25% |
| France | 20% |
| Germany | 19% |
| Russia | 22% (2026) |
| China | 13% |
| Japan | 10% |
| UAE | 5% |
