(MENAFN) Russia will raise its value-added tax rate from 20% to 22% at the start of the new year, following a decree issued by President Vladimir Putin.

The decision, released Friday through the country’s official legal information portal, confirms that the higher rate will take effect on Jan. 1. Essential goods deemed socially significant will continue to be taxed at the reduced 10% rate.

Data cited by general reports from Russia’s Finance Ministry indicate that the federal budget deficit has climbed to 4.2 trillion rubles (around $52 billion) during the first ten months of the year, driven in large part by surging government expenditures.

Much of this increase stems from sharply rising defense spending. At the same time, sanctions targeting Russia’s energy sector have curtailed its access to key European markets for oil and natural gas, compounding fiscal pressures.

MENAFN29112025000045017640ID1110412343