President Vladimir Putin has hinted at new taxes on the wealthy as Moscow readies its draft budget, while the Finance Ministry moves to shield revenues from oil price swings in the fourth year of the Ukraine war.
Russian President Vladimir Putin signalled on Thursday, 18 September 2025, that he is open to raising certain taxes, particularly on high earners, as the government prepares its draft budget amid mounting financial strains from the war in Ukraine.
The draft budget is due to be submitted to parliament on 29 September.
Although parliament typically makes few changes to the proposals, the measures are agreed with Putin in advance.
The government is considering raising the value-added tax (VAT) rate to rein in the deficit and protect reserves, despite Putin’s previous public assurances that tax rates would not rise.
Speaking at a meeting with leaders of parliamentary factions, Putin said measures such as a luxury tax or higher taxes on stock dividends could be “reasonable” during wartime, but urged caution.
“In the United States, I don’t want to politicise this, during the Vietnam War and the Korean War, that’s exactly what they did. They raised taxes specifically on people with high incomes,” he said.
Separately, the Finance Ministry announced a new measure aimed at shielding state finances from oil price fluctuations and Western sanctions on Russian energy exports. Beginning next year, the government will lower the cut-off oil price above which revenues are diverted into the fiscal reserve fund.
“To make our finances more resilient, we are proposing a reduction in dependence on various constraints, whether price-related or volume-related, in the budget’s reliance on oil and gas revenues,” Finance Minister Anton Siluanov said at a public forum.
The potential combination of higher taxes and changes to oil revenue rules underscores the balancing act facing Russian policymakers as they seek to sustain public finances in the fourth year of the war.
