Russia's value-added tax (VAT) rate was officially increased to 20 percent from 18 on Tuesday, according to a law signed by Russian President Vladimir Putin, Xinhua reports.
The law signed in August stipulates that the tax raise becomes effective on the first day of 2019 with the exemption of certain products with preferential tax rates, such as foods, children's items and medical goods.
The tax hike will increase government revenues by 620 billion rubles (about 9.9 million U.S. dollars) a year, according to a statement by the Russian State Duma, or the lower house of the parliament.
Experts believe that the VAT increase is expected to limit Russia's economic growth and drive up its inflation this year.
The previous 18-percent VAT rate came into force on Jan. 1, 2004.
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