Russia raises VAT to 22%: millions will lose social benefits

Distribution of the Russian budget for 2026-2028

According to the Foreign Intelligence Service, the federal budget of Russia for the next three years envisages significant cuts in funding for social and regional programs. Instead, the funds that were previously directed to support the population will be redistributed to the needs of the military-industrial complex and law enforcement agencies.

Changes in the tax system and taxation for businesses

One of the key changes in the budget is the increase of the basic value-added tax rate from 20% to 22%. Finance Minister Anton Siluanov acknowledged that this will lead to rising prices and increase financial pressure on businesses. A radical change in the taxation system for small and medium-sized enterprises is also anticipated, with a significant reduction in the annual income threshold for applying the simplified tax system.

Impact on the aviation industry

Financial cuts affect various sectors, including the aviation industry. Russian airlines, deprived of access to new aircraft due to sanctions, may lose hundreds of passenger liners by 2030. The technical condition of the existing aviation fleet is also deteriorating due to limited maintenance capabilities. The international community has already taken note of this problem.

It is planned that future changes to the Russian budget may lead to a redistribution of funding from social programs to the needs of the military-industrial complex and law enforcement agencies. The increase in the value-added tax and changes in taxation for businesses may significantly impact the economic situation in the country, causing price increases and financial pressure on enterprises. Additionally, the aviation industry will also feel the consequences of reduced budgets due to limited opportunities for technical upgrading and replacement of aircraft.