Russia is set to hike taxes on businesses and consumers as the government looks for ways to support military spending while its war-focused economy creaks at the seams.

The Kremlin's commitment to the ongoing war with Ukraine came under renewed scrutiny Monday when the Finance Ministry released its 2026 draft budget. The spending plans show defense spending next year would stay largely static, and would be funded with tax hikes amid increasingly dour growth forecasts.

Presenting the budget this week, Russia's Finance Ministry said that in order "to finance defense and security" it was proposing a number of tax hikes that it said were an alternative to increased borrowing and a way reduce the budget deficit, which was forecast at 1.6% of GDP in 2026.

Most notably, ministry officials sai

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