State Duma Passes Record Defense Spending Budget in First Reading
The proposed record defense spending comes alongside a new wave of tax hikes designed to fund the rising costs of the war in Ukraine.
The State Duma in Russia has approved a draft three-year federal budget, allocating record defense spending of 17.1 trillion rubles ($202.6 billion) for national defense, which makes up over a third of total federal expenditures. Security forces will account for 44% of government spending, totaling 21.3 trillion rubles ($262.1 billion).
This budget increase comes with a 7.6% rise in national security and policing. To offset the increased military expenditures, spending on civilian sectors such as economic support, healthcare, social support, and housing and utilities will see reductions. The budget proposal also features several tax hikes, including a 22% VAT on cross-border online retail, customs fees on small international packages, and progressive taxes on passive personal income and corporate profits.
Finance Minister Anton Siluanov asserted that the budget maintains the priorities of fulfilling social obligations, addressing the special military operation, ensuring victory, and achieving national development goals. The bill passed with a majority, advancing to the second reading before going to the Federation Council for a vote and ultimately requiring President Vladimir Putin's signature.
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