Russia allocates two-thirds of tax revenue to war effort in 2026

In the first quarter of 2026, Russia’s military expenditures accounted for an unprecedented 65.26% of federal budget revenues, amounting to 5.908 trillion rubles out of total receipts of 8.309 trillion rubles. Revenue from oil and gas fell 45% year‑on‑year to 1.443 trillion rubles, while non‑oil sources rose 7% to 6.866 trillion rubles.

The defense outlay rose 30% from the same period in 2025 and is five times higher than the Jan‑Mar 2021 level, before the war. This spending level equals roughly two‑thirds of all budget income, a sharp increase from 18.44% in 2021 and from 43.34% in the prior year. The heightened outlay has widened the treasury deficit to about 6 trillion rubles by late May, exceeding the anticipated shortfall.

Officials in the finance ministry had anticipated a possible Trump‑Ukraine deal and warned of a worsening deficit if military spending were not curtailed. The defence ministry rejected cuts, seeking to preserve and further increase funding, while civilian spending may be frozen at around 3 trillion rubles for the current year and over 7 trillion rubles across the three‑year budget.