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Russia's finance ministry raises taxes to bolster military budget

Russia's finance ministry has submitted a draft budget proposal for 2027 through 2029 that includes a fresh round of tax hikes designed to bolster the military budget and cover growing deficits. The financial plan introduces tax increases targeting passive income, e-commerce, and corporate windfalls as Moscow struggles to sustain the soaring costs of its war in Ukraine. Projected military spending for 2027 is set to increase by 27% to reach 17.1 trillion rubles. An economist notes that raising taxes on passive income alone could generate an additional 700 billion rubles annually for the state budget.

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  • ✓ Russia's Finance Ministry submitted its draft budget proposal for 2027-29 on Thursday, introducing a fresh round of tax increases.
  • ✓ Russia plans to boost 2027 military spending by 27% to 17.1 trillion roubles.
  • ✓ The Russian government projected a budget deficit equal to 2% of the gross domestic product for the next three years.
  • ✓ The new tax measures target passive income, e-commerce, and corporate windfalls.
🛡️ Source Corroboration: 10 independent reporting domains (100% confidence) ⏱ Read time: ~3 min

What changed

The Russian Finance Ministry unveiled its draft budget proposal for 2027-29 on Thursday, introducing a fresh array of tax increases and a 27% boost to military spending.

Live updates

  1. Russia Raises Taxes to Fund War Budget Deficit

    Russia's finance ministry has submitted a draft budget proposal for 2027 through 2029 that includes a fresh round of tax hikes designed to bolster the military budget and cover growing deficits. The financial plan introduces tax increases targeting passive income, e-commerce, and corporate windfalls as Moscow struggles to sustain the soaring costs of its war in Ukraine. Projected military spending for 2027 is set to increase by 27% to reach 17.1 trillion rubles. An economist notes that raising taxes on passive income alone could generate an additional 700 billion rubles annually for the state budget.

    Why it matters

    Moscow faces deepening budget deficits driven by the escalating costs of its military campaign against Ukraine. Frequent long-range strikes by Ukrainian armed forces on strategically important targets have forced Russia to increase spending to counter these attacks. To sustain these financial pressures, the government projected a budget deficit equal to 2% of the gross domestic product for the next three years.

    What is confirmed

    • Russia's Finance Ministry submitted its draft budget proposal for 2027-29 on Thursday, introducing a fresh round of tax increases.
    • Russia plans to boost 2027 military spending by 27% to 17.1 trillion roubles.
    • The Russian government projected a budget deficit equal to 2% of the gross domestic product for the next three years.
    • The new tax measures target passive income, e-commerce, and corporate windfalls.

    Still unconfirmed

    • Raising taxes on passive income could bring Russia's budget an additional 700 billion rubles a year, according to an economist.

    What to watch next

    • Legislative votes and formal approval of the 2027-29 draft budget proposal in the Russian parliament.
    • Further adjustments to tax rates on passive income, e-commerce, and corporate windfalls.
    • Developments in long-range Ukrainian strikes and corresponding shifts in Russian counter-attack spending.
    Sources used for this update (12)
    1. Financial Times — Russia raises taxes to fund its war in Ukraine
    2. Reuters — Russia plans array of tax hikes in 2027-29 to fund military spending
    3. Meduza — Raising taxes on passive income could bring Russia’s budget an additional 700 billion rubles a year, economist says
    4. Euronews.com — Russia's finance ministry raises taxes to bolster military budget
    5. RTE.ie — 'Are you ready?' - Putin raises taxes following election
    6. www.euronews.com — Russia's finance ministry raises taxes to bolster Putin's military budget
    7. www.themoscowtimes.com — Finance Ministry Unveils 2027 Budget Draft With Fresh Tax Hikes to Fund War Deficit
    8. www.euronews.com — Ukraine - Euronews
    9. flipboard.com — Russia's finance ministry raises taxes to bolster Putin's military budget
    10. www.globalbankingandfinance.com — Russia Plans Tax Hikes in 2027-29 to Fund Military Spending
    11. www.globalbankingandfinance.com — Exclusive-Russia raises 2027 military spending by 27%, budget ...
    12. uk.finance.yahoo.com — Russia plans array of tax hikes in 2027-29 to fund military ...
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