The Ministry of Finance proposed certain tax changes.

The amendments change the standard VAT rate from 20% to 22%. The preferential 10% rate remains for all socially significant goods. The Ministry of Finance will lower the income threshold for taxpayers using the simplified tax system from 60 million to 10 million rubles.

The Russian Ministry of Finance has submitted a budget package to the government, which includes amendments to the Tax Code. It provides for full funding of all previously planned social and development programs. Full funding for defense and security is identified as a priority.

The amendments increase the standard value-added tax rate from 20% to 22%. The preferential 10% rate remains in effect for all socially significant goods, including food, medicines, medical products, and children's goods. Additional revenue from the VAT changes will strengthen the budgetary and financial systems, leading to a sustained decline in inflation in the medium term. This, in turn, will allow the Central Bank to continue lowering the key rate.

It is proposed to lower the income threshold for those using the simplified tax system, above which VAT liability arises. Currently, the threshold is 60 million rubles; it will be lowered to 10 million rubles. This decision is aimed at discouraging business fragmentation schemes aimed at minimizing taxes.

Preferential insurance premium rates for small and medium-sized businesses will remain in effect only for priority sectors, including manufacturing, transportation, and electronics. Small businesses operating in trade, construction, and a number of other industries will switch to standard rates. According to a statement from the Ministry of Finance, the reduced insurance premium rates were introduced as a temporary measure during the COVID-19 pandemic to keep unemployment low. The benefit was subsequently extended at the request of businesses, and it has served its purpose—the SME sector has seen steady positive growth. Therefore, it is proposed to reformulate the insurance premium benefit.

The tax burden on the gambling business will increase. Bookmakers will pay a 5% tax on accepted bets and a 25% profit tax.

If adopted, the amendments to the Tax Code will come into force on January 1 of next year. Sofya Donetsk, chief economist at T-Investments, discusses the impact these changes will have:

Sofia Donetsk, Chief Economist at T-Investments

The funds raised by the VAT change are intended to finance defense and security, according to a press release from the Ministry of Finance. The ministry emphasized that the draft budget maintains the conditions for growth in real wages and incomes. It added that it is based on the unconditional fulfillment of all social obligations and the implementation of national projects.