Russia to raise taxes to cover record military spending

Russia plans to raise taxes starting in 2027 to cover record military spending, costing citizens and businesses 3.7 trillion rubles, according to Reuters. The Finance Ministry's budget draft, approved by the government and due in the State Duma on October 1, introduces a windfall tax on cement, fertilizer, and gold miners, raises the top personal income tax rate on passive income to 22%, and sets a 22% VAT on foreign online purchases. Metallurgical firms will pay about 200 billion rubles annually, while Russians face 500-700 billion rubles yearly in higher taxes. Military spending will rise from 12.9 trillion rubles this year to 17.1 trillion next year, totaling 50 trillion over 2027-2029, with defense consuming every third ruble. Economists say the economy is stagnating as budget deficits grow and reserves shrink.