In 2026, the kremlin Will Shift the Financial Burden of the War onto the Population

russia’s authorities are preparing citizens for a further deterioration in living standards amid a record budget deficit, which will reach 5.74 trillion rubles in 2025. To cover the shortfall, the kremlin plans to raise taxes and cut social benefits, while using senators and governors as “lightning rods” to take the brunt of criticism.

The rf officially plans to increase VAT from 20 % to 22 %, lower the threshold for the simplified taxation system, and revise benefits for self-employed citizens, who currently pay only 4-6 % tax. The self-employment regime may be abolished as early as 2026, forcing people to either register as entrepreneurs or pay the full tax rate.

In parallel, there are discussions about introducing social contributions for those who are not officially employed – the unemployed, freelancers and those who work unofficially. Such initiatives are presented under the guise of “social justice”, but in reality increase the burden on the population.

The authorities also plan to cut social programs: they propose to pay maternity capital only for the third child and to transfer the “family mortgage” program to regional financing. Local budgets, which are in deficit in 68 regions, are forced to increase transport taxes and parking fees, becoming the first line of unpopular decisions.

These changes are consequences of the war, as the rf’s revenues have fallen since sanctions were imposed for its aggression. The kremlin is effectively changing its social contract with citizens: previously, it was “you don’t protest – we guarantee stability”; now, the formula is simple: “you support the regime – pay more."