The proposed tax hike comes as the federal budget deficit reached 4.88 trillion rubles ($61.1 billion) between January and July, already exceeding the government’s full-year target. Weaker global oil prices, a stronger ruble and high interest rates have sapped growth this year, forcing the government to find ways to make up for the lost revenues.
Russia’s Finance Ministry is seeking to reassure consumers, who are likely to feel the strain of a VAT increase in the short term, that the impact on prices will be “moderate and limited.” In a statement on Wednesday, the ministry said a reduced 10% VAT rate will remain in place for esse
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