Putin approved Russia’s 2026–2028 budget, prioritising social programs, defence, and development, and raising the standard VAT rate while keeping reduced rates for essential goods.
Russian President Vladimir Putin signed the laws on the federal budget for 2026 and the planning period of 2027–2028, as well as the laws amending the Budget and Tax Codes and outlining the specific rules for implementing the budget system in 2026, on 28 November 2025.
The package of federal budget laws was previously adopted by the State Duma on 20 November 2024 and approved by the Federation Council on 26 November 2024.
The Federal Budget Law for 2026–2028 was drafted with a focus on key national priorities, including honouring the government’s social commitments to citizens, ensuring the country’s defence and security, and advancing progress toward the national development goals set by the President for achievement by 2030.
The key tax measures:
Higher VAT
The government plans a significant adjustment to the tax system by raising the standard VAT rate from 20% to 22% to support defence and security needs. The reduced 10% VAT rate will remain for essential items like food, medicine, medical products, and children’s goods.
New Rules for Bookmakers
The gambling industry will see tighter tax controls. Bookmakers may be subject to a new 5% tax on accepted bets along with regular corporate income tax. This aims to tax both turnover and real profits.
Changes to the Simplified Tax System
To tackle tax avoidance and business fragmentation, the VAT threshold for the simplified regime will drop from RUB 60 million to RUB 10 million.
Updated Insurance Premium Rules for SMEs
Standard insurance contribution rates will apply to sectors such as trade, construction, and mining. However, processing, manufacturing, transport, and electronics will continue benefiting from reduced rates, an incentive created during the COVID-19 period and credited with supporting SME growth.
