Russians Face New Tax Hike - Situation Critical

Russia's federal budget deficit reached 6.46 trillion rubles in the first seven months of 2026, with July adding another 724 billion. Oil and gas revenues fell by 17%, while spending totaled 28.6 trillion. The Kremlin is considering another tax increase, although this could curb business activity. GDP grew only 0.2% in five months. The Central Bank's gold reserves are shrinking: down 43.5 tons in six months.

Russia's federal budget deficit for the first seven months of 2026 reached 6.46 trillion rubles, with the gap between revenues and expenditures growing by 724 billion rubles in July alone. This was reported by the Ukrainian intelligence service. From January to July, the state spent 28.6 trillion rubles, while revenues from the oil and gas sector fell by 17%. Even the rise in world oil prices amid the US-Iran confrontation did not improve budget indicators. Liquid assets of the National Welfare Fund have shrunk to approximately 3.69 trillion rubles. Russian authorities are considering another increase in the tax burden. In 2025, the corporate profit tax rate was already raised to 25%. Intelligence believes that the question of the scale of the increase could become one of the main economic decisions of the autumn. However, higher taxes could limit business activity, investment, and economic growth rates. The Russian economy shows signs of stagnation: in the first five months of 2026, GDP grew by only 0.2%. Vladimir Putin called for stimulating investment, but the largest companies are cutting capital expenditures due to lower profits, high credit costs, and uncertainty. The Central Bank has been reducing gold reserves for six consecutive months: in the first half of the year, the deficit approached 6 trillion rubles, in June the gold reserve decreased by 9.33 tons, and since the beginning of the year by about 43.5 tons.