Russia started the new year with a value-added tax (VAT) increase, raising its rate from 20% to 22% to contribute to funding the war in Ukraine. This adds to the existing pressures on household budgets. The increase is expected to provide an additional 1.187 trillion rubles ($15 billion) to the state treasury by 2026. The hike, which was approved last year, faced criticism from businesses and consumers already struggling with rising inflation and prices due to Western sanctions and increased defense spending. Russian President Vladimir Putin said last December that the VAT increase is necessary to balance the country's budget.
