Russia’s draft 2027–2029 budget prioritises defence and security spending while projecting a wider fiscal deficit, with new and higher taxes on excess industry profits, cross-border e-commerce, securities, property sales, and bank deposits to help finance the shortfall.
The Russian government unveiled its draft three-year budget on 24 September 2026, laying out plans for 2027 through 2029 that prioritise military spending while widening the fiscal deficit. The budget must reach parliament by 1 October 2026.
For 2027 alone, state revenues are projected at RUB 43.3 trillion while expenditure will reach RUB 48.8 trillion. This creates a deficit equal to 2.2% of GDP, a significant jump from the 1.2% deficit forecast in the previous projection.
The government’s Finance Ministry confirmed that defence and security remain the “strategic priority,” with planned spending covering weapons procurement, modernisation of defence enterprises, and allowances for military personnel.
To cover the shortfall, the government proposed levying taxes on excess profits in the metals and fertiliser industries, capitalising on elevated global prices. Additional measures include new taxes on cross-border electronic commerce and higher rates on passive income from securities, property sales, and bank deposits. The income tax changes alone would affect approximately 4 million individuals.
This marks the second round of tax increases in as many years. The government previously promised no further tax hikes, but the mounting costs of the war in Ukraine have forced a reversal.
