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As the VAT increase has affected the citizens of the Russian Federation

12 September 2019

As the VAT increase has affected the citizens of the Russian Federation

In February 2019, the state Duma and the Russian government introduced a tax increase, from 18% to 20%. The VAT increase led to an increase in inflation, decline in GDP growth, the increase in the share of the shadow business and a decrease in personal finances from the citizens. Of course, when the bill was introduced, the experts did not take into account the adverse factors that negatively impacted the finances of all citizens of the Russian Federation.


The value added tax is the most popular tax in the country, which pay almost all. Thanks to the VAT filled the state Treasury of the Russian Federation, the profit is equivalent to income from the export of hydrocarbons. The revenue from this tax goes to the allocation of national projects that want to implement in the next 6 years. Due to the increase in percent, the Treasury received about 650 billion virtually any.


For a good proportion of Russians began negatively 2019. In the first week of January, inflation increased by 0.7%, after they began to appreciate food, 1.7%. Despite the fact that there are a number of preferential and socially significant goods which are subject to 10% VAT, the price jumped from 6% to 17%. Learn more about the rise in price of food:

  • meat - 16-17%;
  • butter - up to 17%;
  • vegetables - up to 10%;
  • fruit - up to 10%;
  • eggs - 21%;
  • sugar - 20%.


Of course, if you look at the ratio of, the difference of 2% is not considered fatal in relation to VAT, however, about the rise in price says the combination of different factors, one of them is a cumulative effect. The bottom line is that the manufacturer of the product is a cyclic chain of production, in which, after each manipulation of the product occurs an additional charge. In Russia there are few companies that can afford the whole production of the product at the same company.


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