Russia’s finance minister says authorities ‘didn’t go too far’ with tax hikes, though ‘there was such a risk’
Russia’s Finance Minister Anton Siluanov said budget revenues from value-added tax, whose rate was raised at the start of the year, are running ahead of projections. Siluanov made the remarks at the St. Petersburg Economic Forum, the Russian business news outlet RBC reported. He did not provide specific figures.
Siluanov said the tax picture signals that the economy will grow faster than expected. The Russian government had projected economic growth of 1.3% of GDP for the year; the current figure stands at 0.4%, the Finance Minister said.
“Despite two packages of tax changes […] taxes are growing, and there was a risk that we might go too far somewhere. No, we didn’t. The budget execution figures for five months clearly show this,” Siluanov said, without specifying which budget execution figures he had in mind.
As of January 1, 2026, Russia’s value-added tax (VAT) increased from 20% to 22%. The income threshold below which businesses can qualify for reduced tax rates was also lowered. The reform has been cited as one of the reasons many small and medium-sized enterprises have shut down.
According to Finance Ministry data as of early May, Russia’s budget deficit has grown to 5.8 trillion rubles (2.5% of GDP) since the start of the year, significantly exceeding the planned 3.79 trillion rubles (1.6% of GDP).
Total budget revenues for the first four months of the year fell 4.5% year-on-year to 11.721 trillion rubles.
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