Budget deficit widens; Russia may freeze spending and raise taxes next year.

Russia plans to maintain federal spending unchanged next year while considering increasing taxes to help fill a widening budget gap. Officials have proposed raising the value-added tax starting in 2026, and expanding the tax base to a broader range of taxpayers, which could generate about 1 trillion rubles in revenue annually. The costs related to the war and the decrease in oil and gas revenue have forced Moscow to consider difficult choices to balance the books. The government is not only considering increasing taxes, but may also redistribute and cut spending on some civilian projects. The Russian Ministry of Finance has not responded.