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The already struggling Russian population is going to have an even harder time making ends meet, it seems.
The Russian economy continues to struggle with the war in Ukraine nearing its forth anniversary.
Continued Ukrainian strikes on Russian oil and gas infrastructure combined with a plethora of international sanctions, low oil prices and increasing expenses to military production, disability for war veterans and the likes, is putting the Russian economy en route to recession by the second half of 2026, analysts suggest.
But that must be avoided at any cost, seems to be Putin’s mindset. According to documents released on the Kremlin’s website, and reviewed by The Moscow Times, the Russian leader is demanding a massive increase in tax collection to revive economic growth.
And that will probably mean increased taxes for the Russian population.
New targets set
According to reporting by The Moscow Times, citing the Kremlin documents, Vladimir Putin has instructed the government to deliver a “significant increase” in tax revenues by 2026, according to documents published on the Kremlin website. The order stems from discussions at the Council for Strategic Development and National Projects.
The same materials show Putin calling for steps to “whiten the economy”, meaning a reduction in informal and undeclared activity, beginning in the first half of 2026. These measures are meant to coincide with efforts to restart economic expansion.
Official data underline the challenge. The Ministry of Economic Development reported that gross domestic product grew by just 0.1% year on year in November, while industrial output fell 0.7%, tipping the sector into recession.
Inflation and oversight
The president also demanded progress on inflation, with a target of 4–5% in line with the Central Bank’s forecast. Oversight of the programme has been assigned to Prime Minister Mikhail Mishustin, Central Bank Governor Elvira Nabiullina and senior regional officials.
They are required to submit a detailed report by June 1, 2026, outlining how the targets will be met and how economic growth will be supported alongside tighter fiscal controls.
How revenue rises
Under Russia’s budget law, the federal treasury must raise an extra 3.2 trillion rubles in taxes this year, lifting total revenue to 40.28 trillion rubles.
The Ministry of Finance expects 1.2 trillion rubles to come from increasing value-added tax to 22%, the highest rate since 1992. Another 200 billion rubles is forecast from changes to the simplified tax system for small businesses, which lowers the revenue threshold for VAT exemption.
A new “technological tax” on technology and electronics is due to take effect on September 1, with officials projecting 200 billion rubles in revenue over three years.
Closing the deficit
According to the Finance Ministry, these measures should help narrow the budget shortfall. This year’s deficit reached 5.7 trillion rubles, around five times higher than initially planned.
Next year, the ministry expects the “gap” to fall to 3.8 trillion rubles, or about 1.6% of GDP, easing pressure on state finances.
Sources: Kremlin website, The Moscow Times, Foreign Intelligence of Ukraine
