Russia’s government has announced plans to raise the rate of value added tax from 20 to 22 per cent, backtracking on President Vladimir Putin’s promises as the war against Ukraine drags on the economy.
The step goes against Putin’s pledge last year not to raise taxes again before 2030, but the finance ministry justified it by saying the funds would primarily be used to cover Russia’s spiralling defence and security expenditure, as well as for support for veterans and social spending.
The plan came a day after US President Donald Trump said Russia was a “paper tiger” and in “big economic trouble”, which could open up a window for Ukraine to make major gains on the battlefield.
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