Russia plans sharply higher war spending and tax increases for 2027
Russia's 2027 budget earmarks 17.1 trillion rubles for war and defence, 42.8% more than this year. To help pay for it, tax rises are planned, while state gold reserves have fallen for a tenth month in a row.
Russia intends to allocate 17.1 trillion rubles, roughly 206.2 billion US dollars, to war and defence in 2027. To cover this spending, the Kremlin is preparing to raise taxes, while the country's gold reserves continue to shrink. This was stated by Jānis Slaidiņš, a major in Latvia's National Armed Forces (NBS) and a staff officer of the National Guard, on the TV24 programme "Aktuālais par karadarbību Ukrainā" (the latest on the fighting in Ukraine). The figures show Russia is putting growing pressure on its economy to fund the war against Ukraine.
Spending and taxes
The planned sum is 42.8% higher than the military spending set for this year. Next year it could reach 6.9% of Russia's gross domestic product and make up 35.2% of all federal budget expenditure.
About 12 trillion rubles are to go towards buying weapons and military equipment. Higher taxes on residents and businesses could, by the Kremlin's estimates, bring in an extra 1.5 trillion rubles, or about 18 billion US dollars.
Gold reserves shrinking
Slaidiņš also pointed to the decline in Russia's monetary gold reserves. In September they fell by 6.2 tonnes, to the lowest level since the end of 2019. September was the tenth month in a row in which the Russian Central Bank reduced its gold holdings.
At the same time, Russian gold exporters have increasingly turned to Asian markets following restrictions imposed by Western countries. Financial data cited in the programme indicate that since the start of the full-scale war, Russian gold worth about 35 billion US dollars has been exported via Hong Kong.
Slaidiņš noted that Russia can still use its gold reserves to raise additional funds, but the extra financial burden may also be placed on the population.
