Corruption As a Tax: russia’s Budget Loses More than It Receives from VAT

In the first nine months of this year, the number of criminal cases related to corruption in russia increased by 16 % year-on-year. In monetary terms, losses from corruption crimes in 2025 increased by 20 % and are estimated at almost 19 billion rubles – by 21 % more than in 2024. For comparison, the federal budget allocates 22.3 billion rubles for the construction of 100 kindergartens across the country by 2030.

Against this backdground, russian law enforcement agencies are trying to demonstrate progress in fighting corruption through high-profile and exemplary cases. The most resonant of these concern structures associated with the ministry of defense of the rf. In the summer, former deputy minister of defense Timur Ivanov was sentenced to 13 years in prison for embezzlement of state funds. The property seized from him is valued at nearly 2.5 billion rubles and includes land plots, cars, art collections, and antique weapons.

Former chief of the personnel department of the ministry of defence of russia Yuri Kuznetsov also stood trial, accused of receiving a bribe of 30.5 million rubles. Another case concerns deputy minister Pavel Popov, who was involved in the embezzlement of 25 million rubles during the creation of the “Patriot” propaganda park.

Despite the impressive statistics for the domestic audience, experts question the effectiveness of such a campaign. According to their estimates, potential annual stealing from russia’s state budget could reach about 20 % of GDP. Even a tentative acceptance of this figure means losses of 8–10 trillion rubles per year. For comparison, raising VAT to 22 % in 2026 is estimated to bring only about 1.2 trillion rubles in additional revenue to the budget.

International indices also show a deterioration in the situation. According to Transparency International’s “Corruption Perceptions Index” for 2024, russia ranked 154th out of 180 countries, which is the country’s worst score ever and a drop of 13 positions at once compared to the previous year.