$13 billion VAT fraud ring exposed in Russia
Russia’s security service has uncovered a massive tax fraud network that allegedly deprived the state of more than $13 billion in revenue, in one of the country’s largest financial crime cases in recent years.
The Federal Security Service said the group orchestrated a scheme involving fake value-added tax (VAT) claims over a three-year period, costing the government around 1 trillion roubles, News.Az reports, citing Reuters.
According to investigators, the network created approximately 4,800 shell companies that issued fraudulent invoices to about 40,000 organizations. These fake transactions were used to illegally obtain VAT deductions.
Authorities said they have detained the suspected organizers and seized key evidence during raids conducted across multiple regions. A criminal case has been launched in coordination with other state agencies.
VAT is Russia’s primary non-energy tax and plays a crucial role in government revenues. Officials say it accounted for roughly 39% of the federal budget in 2026, making fraud in this area particularly significant.
The case comes as Moscow intensifies efforts to combat tax evasion, especially amid declining energy revenues due to Western sanctions linked to the war in Ukraine.
The government recently increased the VAT rate to 22% and pledged stricter enforcement to protect state finances.
The security service described the scheme as the largest “paper VAT platform” uncovered in Russia, with estimated losses equal to about 1% of total budget revenues between 2023 and 2025.
The crackdown highlights growing pressure on authorities to secure alternative revenue streams and tighten financial oversight during a period of economic strain.
News.Az
By Aysel Mammadzada
