Ukrainian intelligence: Tax pressure in Russia is growing, banks will be first to be hit

That is according to Ukraine's Foreign Intelligence Service (FIS), Ukrinform reports.

"Despite Putin's public promises not to increase the tax burden, the authorities are already discussing raising the VAT rate from 20% to 22%. While this decision contradicts earlier statements, it is inevitable: there is nowhere left to cut spending -- neither the army nor social programs are seriously being considered," the FIS said.

VAT is emphasized as the main source of federal budget revenue: in 2024, it accounted for nearly 37% of all inflows, or 13.5 trillion rubles.

"The VAT rate was last changed in 2019 -- from 18% to 20%. Now, to reduce the deficit and preserve the budget rule, the government is forced to take this step again. Other taxes have already been raised, but their effect is limited. The projected deficit for the end of 2025 ranges from 5 to 8 trillion rubles, making the planned 2.2 trillion rubles (0.9% of GDP) for 2026 a 'financial fantasy'," the intelligence agency said.

According to the FIS, banks will be the first to be hit: a bill has been submitted to the State Duma proposing a one-time windfall tax of 10% on credit institutions. The calculation mechanism repeats the 2023 model, when a similar levy on large companies brought the budget 315 billion rubles. Banks are expected to contribute another 200 billion rubles -- a negligible sum against the backdrop of the overall deficit.

These measures, the report stresses, are not a strategy but an attempt to plug holes.

"The windfall tax was not a decisive source of revenue in 2023, and it will not become one now. Raising VAT is not a reform but a systemic crisis," the FIS said.