Protests have erupted in Russia following sharp increases in taxes and the automotive scrappage fee. In Vladivostok, around a hundred citizens gathered in a designated area to express their discontent with the new financial burdens.
The main demand of the protesters is to cancel the raised scrappage fee, which now increases hundreds of times. Russians are concerned this will make it harder to buy new cars and will significantly affect prices. These moves by the government seek to address budget shortfalls, with a large share of funds allocated to the war against Ukraine.
President Vladimir Putin had previously claimed there would be no increase in tax burdens, but starting January, the VAT is set to rise from 20% to 22%, and the scrappage fee will increase 500-800 times. Officially, this is explained on environmental and industrial grounds.
In practice, the new scrappage fee does little to save the Russian car industry: AvtoVAZ is cutting jobs and nearing bankruptcy. Besides autos, utility tariffs are also rising.
Experts note that these financial policies fuel inflation and rising prices, worsening the economic situation and citizens' purchasing power. The population faces added pressure as they fund war expenditures.
Meanwhile, the Russian army faces funding shortages and reduced payments to new contract soldiers, further deepening the economic crisis. Analysts predict these outcomes will complicate Russia’s continued financing of its war in Ukraine.
