Bank of Russia: VAT Increase to Affect Two-Thirds of Consumer Goods

17 July 2018 (09:17)

UrBC, Moscow, July 17, 2018. The 2% increase in the value-added tax (from 18% up to 20%) is going to affect 70% of consumer goods prices, the Bank of Russia’s Research & Forecast Department’s data analysis findings indicate.

It is therefore believed that consumer prices will rise 0.8% to 1.25% once the VAT increase comes into effect. The overall inflation rate is expected to speed up over 4% as a result.

The State Duma is currently considering rising the VAT to 20%. Under the terms of the draft bill under processing, the increase should come into force on January 1, 2019. The bill has passed the first reading already.

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