Russia's Wallet Woes: How Tax Hikes Are Pinching Pockets

Russia's economy is in a bit of a tight spot. After a few years of growth fueled by war spending, things are slowing down. Oil prices are dropping, and the government is spending more than it earns. So, where is the Kremlin looking to make up the difference? Right into the wallets of ordinary people and small businesses. Get ready to pay more for just about everything. The value-added tax (VAT) is increasing to 22% from 20%, which could bring in around $12. 3 billion. But that's just the beginning. More tax hikes are on the way, including higher prices on alcohol, cigarettes, and even vapes. Small businesses, like corner stores and salons, will now have to collect VAT, which could force some to shut down. And if you're thinking about buying a car, especially an imported one, be prepared to pay more. People are not thrilled about these changes. Higher taxes mean higher prices, and this hits low-income families the hardest. Some are worried that small businesses won't be able to survive the extra costs. Meanwhile, the government is also raising fees for things like driver's licenses and considering new taxes on tech gadgets. Russia's economy shrank earlier this year and is only expected to grow by about 1% this year. High interest rates and inflation are part of the problem, along with lower oil prices and Western sanctions. The budget deficit is growing, and the government is trying to avoid borrowing too much to keep inflation in check. The Kremlin won't run out of money anytime soon, but tough choices are coming. Putin can keep spending on the war, or he can focus on keeping people's lives comfortable. He can't do both forever.