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Putin hopes VAT increase is temporary measure

The Russian president noted at the same time that the majority of activities anticipating adoption of federal laws is scheduled for the fourth quarter of 2026 in the plan for improving legality in individual economic sectors

MOSCOW, December 8. /TASS/. Russian President Vladimir Putin expects the increase of the value-added tax (VAT) rate from 20% to 22% will be a temporary solution.

"When we held all these meetings on the given matters (and by the way, the Central Bank supported, and the Finance Ministry actively [backed - TASS]), the decision was that when choosing all these instruments, it is more honest, straightforward and reliable to simply resort to such an increase. A temporary one, I hope, but the increase," the head of state said at the meeting of the Council for Strategic Development and National Projects.

Putin noted at the same time that the majority of activities anticipating adoption of federal laws is scheduled for the fourth quarter of 2026 in the plan for improving legality in individual economic sectors. "We have actually increased the VAT rate now," the Russian leader said.

When the VAT rate increase was discussed, "the issue immediately arose that the collectability [of the tax] will worsen but not grow," Putin reminded. "This is because a portion will simply go to the shadow [sector] - this should be prevented. An agreement was reached to take certain measures. And the postponement was made to the fourth quarter of 2026. Let alone our domestic political calendar moving in a certain way, these decisions - they are serious one, they will affect certain economic sectors. If these are to be taken - they should be taken now. Openly, directly and honestly. There is nothing particularly terrible here. It should simply be expedited," the head of state added.

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