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Russian Regions Implement Tax Hikes to Plug Budget Gaps Amid Rising Costs
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Several regions in Russia have started reducing tax benefits, hoping to boost their budgets amid growing economic challenges, Russian state outlet Vedomosti reported on October 14.
The move affects local and regional taxes, with the Yaroslavl region, for example, calling for an increase in local property and land taxes to the maximum allowed under the Tax Code.
These changes are aimed at increasing local revenue, with the government seeking to allocate additional funds to social programs, according to Vedomosti.
Across other regions, similar adjustments are being made to the tax benefits granted to newly registered businesses, while regions like Dagestan plan to phase out some tax exemptions to improve the efficiency of government spending.
In contrast, some regions, including Vladimir, Murmansk, and Tver, have opted to maintain existing tax reliefs, Vedomosti reported.
Despite these adjustments, the overall fiscal impact on regional budgets remains limited, with tax benefits accounting for about 5% of consolidated budget revenues.
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Experts suggest that while these moves will help balance the budget in the short term, they may not address the larger systemic issues facing regional finances. Sanctions, rising costs, and foreign exchange losses have all contributed to the current fiscal shortfall.
Previously, it was repoted that Russia’s economy is sinking deeper into stagnation, with GDP growth in August 2025 hitting only 0.4%, down from 1.1% in the second quarter, and a sharp decline from 4.3% last year. This marks the second month of near-zero growth, with many sectors outside defense in recession.
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