Russia reduces social spending by $8.3 billion: details of the budget for 2026-2028

The draft federal budget of Russia for 2026–2028 raises the issue of reallocating resources from social and regional programs in favor of the military-industrial complex and security agencies. This was reported by the Foreign Intelligence Service of Ukraine.

Increase in VAT rate and new taxation system

The government plans to increase the VAT rate from 20% to 22%, which will lead to rising prices and pressure on businesses. A new taxation system for small and medium-sized enterprises will be introduced, with a reduction in the annual income threshold for the simplified system and an increase in insurance contributions for IT companies. These changes will come into effect in 2026.

Some state programs, such as 'Chemical and Biological Safety', 'Development of the Aviation Industry', and 'Energy Development', will face funding cuts. At the same time, funding for 'Development of the Electronics and Radio Electronics Industry' in the interests of the military-industrial complex will increase 4.4 times to $2.2 billion in 2026.

As a result of the draft budget, there will be significant changes in resource allocation, particularly, the VAT rate will rise, and funding for certain programs will be cut in favor of other priorities, notably the military-industrial complex.