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Signs of Russia’s so-called special military operation are everywhere in Moscow, from roadside recruitment adverts to Z-themed souvenirs.

Now there is another example – a proposed tax hike, that amounts to the biggest shake-up of the Russian tax system in a quarter of a century.

As the war in Ukraine continues to drain the Kremlin’s coffers, the government is scrambling to find new ways to finance it.

Read more: Ukraine-Russia war latest updates

Pro-Russian 'Z' patches on display at a store in Moscow
View of a store in Moscow selling pro-Russia and pro-war merchandise

Its answer is a new progressive income tax rate that will target the wealthy, as well as a rise in corporation tax.

The proposals were first mooted by Russian president Vladimir Putin on the campaign trail ahead of his re-election in March. Analysts say he was forced to act.

Defence spending has surpassed 8% of GDP, and is sucking up nearly a third of the state budget this year.

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“It seems like the tax reform is a tool to move the economy from butter toward guns,” said Alexander Kolyandr, a non-resident senior fellow at the Centre for European Policy Analysis.

“The government is no longer concerned about you eating well, but rather about you producing more guns.”

The reforms mark a dramatic departure from the Russian leader’s previous tax policies.

Pic: AP
Image:
Pic: AP

In 2001, shortly after assuming office, he introduced a flat rate of just 13% that was applied universally, and most Russians have been paying the same rate ever since.

The move simplified a previously complicated tax regime which few adhered to and it successfully boosted revenues – and his popularity – as a result.

A higher rate of 15% was established in 2021 for those earning more than five million roubles (around £43,500).

Now the finance ministry wants to lower the threshold for the 15% rate, so it applies to annual incomes from 2.4 (around £20,800) to five million roubles, and introduce more bands above.

Incomes between five and 20 million roubles (around £43,500 to £174,000) will be taxed at 18%, those between 20-50 million roubles (around £174,000 to £434,000) at 20%, and anything over 50 million roubles at 22%.

The proposals will also see corporation tax increase from 20% to 25%.

Pro-Russian artwork in Moscow, featuring the 'Z' icon used throughout the war in Ukraine

If adopted by the Russian parliament, the changes will come into force next year and generate 2.6 trillion roubles (£22.5bn) in budget revenues, the government said.

“For the past two years, the Russian economy has been running on state spending,” Mr Kolyandr said.

“It cannot last forever, because in effect, it’s mortgaging your future.

“To get this mortgage more appealing, you need more money.”

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According to the Kremlin, 3% of the workforce will be affected by the changes, which it insists are fair.

It says the reforms should solve national problems, reduce inequality and help develop Russia’s regions.

But the official line has been met with some scepticism on the streets of Moscow.

A woman takes photos of art about Russia's war in Ukraine in Moscow

“I think they don’t have enough money for the special military operation, that’s why they’re introducing it,” Sergei told Sky News in Moscow.

Ulyana agreed, adding: “I don’t think it’s fair to tax more from 200,000 [roubles a month].

“This will just affect people who work a lot.”

In reality, everyone here is affected by Russia’s current path. This is merely the latest impact, and it will be felt in people’s pockets.

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Russia and Belarus’s military drills are part-theatre – but Moscow is trying to send a message

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Russia and Belarus's military drills are part-theatre - but Moscow is trying to send a message

At times, the sound of these military drills was deafening.

There were fighter jets screaming overhead, air strikes on “enemy” forces, and tracer rounds from artillery units pounding out of the barrels.

Fireballs and mushroom clouds would periodically appear far off on the landscape, followed by a sudden explosive thud several seconds later.

I was watching from the safety of a viewing platform, along with other members of the international media.

But even at that distance, the various blasts were still powerful enough to reverberate through me.

Russian troops load an Iskander missile onto a mobile launcher. Pic: Russian Defense Ministry Press Service via AP
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Russian troops load an Iskander missile onto a mobile launcher. Pic: Russian Defense Ministry Press Service via AP

This was the fourth day of ‘Zapad-2025’ – the joint military drills Russia holds with Belarus roughly every four years.

It took place at a training ground near the city of Borisov in Belarus, 150km from the Lithuanian border.

Moscow and Minsk insist the exercises are “defensive”. In this case, they said they were gaming out how they would respond to an attack by a NATO member.

But as I watched, I couldn’t help feeling that the training aspect was only one part of it.

The other part felt like theatre – a show of strength designed to intimidate those watching across the border on Europe’s eastern flank.

A helicopter gunship. Pic: AP
Image:
A helicopter gunship. Pic: AP

The drills were smaller than previous years, most likely because Russia still needs its troops and equipment at the front in Ukraine.

But it still felt like Moscow was trying to send a message here – that despite the costs and casualties incurred fighting Kyiv, it’s still a force to be reckoned with.

For Belarus’s neighbours, these are anxious times. The last Zapad drills in 2021 were used as a springboard for Russia’s invasion of Ukraine a few months later. And so this time, Poland has closed its border, and like Lithuania, it’s holding military drills of its own.

A ground drone drives through the training ground. Pic: AP
Image:
A ground drone drives through the training ground. Pic: AP

Afterwards, I tried to catch up with some of the defence dignitaries from foreign militaries, who had been invited to observe the drills. I wanted to see what they made of the show.

“A very good demonstration,” a senior officer from Pakistan told me, declining to give his name.

“It gives us an insight of how war is being fought, with new technologies, in this part of the world.”

But what about Poland’s concerns?

“Are they right to be nervous?” I asked. “Would you be nervous if you were next door?”

“Why would I be nervous?” he replied. “Being Pakistani, I know what I’m capable of. So I shouldn’t be nervous by somebody else doing exercises.”

“So NATO has no need to worry?” I continued.

“No, I don’t think so. NATO shouldn’t be worried.”

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There were actually some representatives from NATO members among the observers.

Delegations from Hungary and Turkey are no surprise – both countries have good relations with Moscow – but a team from the United States did raise eyebrows.

Read more:
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Russia getting ‘ready for war with NATO’

A further sign, it seems, that the Trump administration is seeking to build bridges with the Kremlin, despite the lack of progress towards a Russia-Ukraine peace deal.

Unfortunately, none of those officials would answer my questions. Wary, perhaps, of sticking their head above the parapet, as the alliance seeks to present a united front.

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Putin is trying to trick Donald Trump into delaying sanctions, Volodymyr Zelenskyy tells Sky News

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Putin is trying to trick Donald Trump into delaying sanctions, Volodymyr Zelenskyy tells Sky News

Vladimir Putin is trying to trick Donald Trump and the US into delaying sanctions, Volodymyr Zelenskyy has told Sky News.

Speaking to Sky News’ Yalda Hakim at the Presidential Palace in Kyiv, the Ukrainian president was asked about the Russian and US leaders’ summit in Alaska last month – and whether he thought it was a mistake.

“I think it gave a lot to Putin,” he said, “and I believe, if it was a trilateral meeting, we would have some result.”

Zelenskyy said Putin is 'doing everything he can to avoid sanctions'
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Zelenskyy said Putin is ‘doing everything he can to avoid sanctions’

During their summit in Alaska, the Russian leader is said to have told Mr Trump he wants the eastern Donetsk and Luhansk regions – and would give up other Ukrainian territories held by his troops in exchange.

Since then, the US president has resumed threats of sanctions against Russia and called for NATO countries to stop buying Russian oil to end the war.

Russian strikes on Ukraine have also continued, and in the last few days there have been incursions into the airspaces of Poland and Romania, while a proposed summit between Mr Zelenskyy and Mr Putin has not materialised.

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Trump-Putin meeting: Key takeaways

After being asked whether Mr Putin is trying to trick Mr Trump, Mr Zelenskyy agreed.

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He added: “He’s doing everything he can to avoid sanctions, to prevent US and Trump from putting sanctions on him, and if you keep postponing applying sanctions any further, then the Russians will be better prepared.”

Mr Zelenskyy also told Hakim that Mr Putin “wanted to escape from political isolation” with the Alaska summit, and believes “he should have paid more” for the meeting with the US president.

“He should have received a setback in this war and stop,” he said. “But instead, he received de-isolation. He got the photos with President Trump.

“He received public dialogue, and I think this opens the doors for Putin into some other summits and formats, because that’s how it is, and we see that, we observe this, and I don’t think he paid anything for it.”

The Ukrainian president continued to say that Mr Putin “should pay, firstly, because he started the war, and secondly, because (he is) trying to find a way out of isolation”.

Read more from Sky News:
Moscow trying to send a message with military drills
Russia’s war rehearsals offer NATO one thing

British fighter jets to fly defence missions over Poland

Zelenskyy adds Putin only 'understands force' in a call for more support
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Zelenskyy adds Putin only ‘understands force’ in a call for more support

Mr Zelenskyy added that it is “very important not to give Mr Putin this space, because otherwise he won’t feel compelled that he has to stop the war”.

“He’s waging the war and everyone is trying to stop him by arguing, by asking him – but instead force should be used,” he said. “He understands force. That’s his language. That is the language he understands.

“He doesn’t speak many languages, but that’s the language of force he understands, just like Russian, his mother tongue – and we ask very much European and US countries to do that, to show that.

“Yes, they take some steps, such as sanctions, for example, but more needs to be done, quicker.”

Sky News will broadcast an extended interview in President Zelenskyy from 6am on Tuesday morning

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Sudan war: Torture, rape and forced starvation as paramilitaries suffocate besieged city

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Sudan war: Torture, rape and forced starvation as paramilitaries suffocate besieged city

Faces marked by terror and torment fill North Darfur’s displacement camps.

Their eyes fill with despair as they describe what they have survived during a 16-month siege on one of Sudan‘s oldest cities.

It has entrapped their loved ones and spread armed violence, leaving village after village burnt to the ground.

Extreme cases of torture, rape and forced starvation are shared again and again in horrifying detail.

This elderly man told us he was blinded by the RSF when he tried to flee
Image:
This elderly man told us he was blinded by the RSF when he tried to flee

Women collapse into sobs as they contemplate the future and the elderly raise their hands to the sky, trembling and empty, to pray for overdue relief.

In shelters which have seen little to no humanitarian aid, camp directors hand us lists showing requests for clean water, medical supplies and food. Even the trademark white United Nations tarp is scarce.

Some frayed tent material is used to close the gaps in the stick-lined walls that surround the traditional huts displaced families have built for themselves.

They use them as a temporary refuge from the battles that rage for control of the regional capital, Al Fashir.

Instead of fleeing into nearby Chad, they wait here for news that the siege has been lifted and they may finally be able to return.

But that news may never come.

The battle for Al Fashir – and Sudan

Al Fashir is being suffocated to death by the paramilitary Rapid Support Forces (RSF) as they push to claim full control of the Darfur region as a base for their parallel government, after the military recaptured the capital Khartoum and other key sites in central Sudan.

Close to a million people are facing famine in Al Fashir and surrounding camps as the RSF enforces a full blockade, launching armed attacks on volunteers and aid workers risking their lives to bring in food.

Inside the city, thousands are bombarded by almost daily shelling from surrounding RSF troops.

The RSF have physically reinforced their siege with a berm – a raised earth mound. First spotted by Yale Humanitarian Research Lab, the berm is visible from space.

The Sudan war started in April 2023, when long-simmering tensions between the Sudanese army and the RSF broke out in Khartoum.

UN agencies said in July that some 40,000 people have been killed and almost 13 million displaced.

Relevant descriptionSeveral mediation attempts have failed to secure a humanitarian access mechanism or any lulls in fighting.

‘We could hear some of them being killed’

As the bombs drop on Al Fashir, war-wounded civilians travel by road to the last functioning hospital in the state. But the beds in Tina Hospital are largely empty.

The facility cannot afford to provide free or subsidised treatment to the people that need it.

“It is so difficult. This hospital cannot care for a patient without money,” says Dr Usman Adam, standing over an emaciated teenager with a gunshot wound in his stomach.

“We need support.

“Either medication or money to the victims – by anyhow, we need support.”

Maaz, 18, a victim of a gunshot wound, is treated in the last functioning hospital in North Darfur
Image:
Maaz, 18, a victim of a gunshot wound, is treated in the last functioning hospital in North Darfur

In nearby camps, women are grieving brothers, fathers, and husbands killed, missing or still trapped inside Al Fashir. Many of them were forced to face Rapid Support Forces (RSF) torture as they tried to escape.

“If you don’t have money to pay ransom, they take you inside a room that looks like an office and say ‘if you don’t have anything we will kill you or worse’,” says 20-year-old mother Zahra, speaking to us at a girls’ school in Tine that is now a makeshift shelter.

“They beat the men, robbed them and whipped them. We could hear some of them being killed while we women were rounded up on a mat and threatened. We gave them money, but they took the other girls into a room, and we couldn’t tell if they were beaten or raped.”

Zahra was threatened by the RSF and heard people being killed
Image:
Zahra was threatened by the RSF and heard people being killed

The women around her on the mat echo Zahra’s anguish.

“They beat us, tortured us, humiliated us – everything you can imagine!” one yells out in tears.

A mother named Leila sits next to her four children and stares down at the ground. I ask her if she has hope of returning to Al Fashir, and she starts to say no as the women nearby shout: “Yes! We will return by the grace of God.”

Leila complies with weak affirmation, but her eyes have the haunting resignation of permanent loss. Her city, as she knows it, is gone.

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Babies and young children silently stare out from their laps. Many of them wear the signs of physical shock. An older woman on the mat tells us her infant grandson was blinded by the extreme conditions of their escape and takes us to see him and his mother in their hut.

“We fled Al Fashir to Tawila camp while I was heavily pregnant,” says Nadeefa, as her son Mustafa cries on her lap, unable to focus his eyes.

Mustafa was blinded as a newborn after his mother fled the RSF
Image:
Mustafa was blinded as a newborn after his mother fled the RSF

“After I had given birth, we made the journey here. Mustafa was only 16 days old and could not handle the harsh conditions. As time went on, we realised he couldn’t see. We think he was blinded as a newborn on the road.”

Her mother and mother-in-law sit on the mat next to her and take turns trying to calm Mustafa down. Her mother-in-law Husna tells us that her own son, Mustafa’s father, is missing.

“We don’t know where my son is,” she says. “He disappeared as we fled.”

Mustafa's father went missing as the family fled the RSF
Image:
Mustafa’s father went missing as the family fled the RSF

‘They killed my children’

An elderly woman, Hawa, approaches us in the same yard with her own story to tell.

“These people [the RSF] killed my children. They killed my in-laws. They orphaned my grandchildren. They killed two of my sons.

“One of my daughters gave birth on the road and I brought her with me to this camp. I don’t have anything,” she says, trembling as she stands.

“They raped my two younger daughters in front of me. There is nothing more than that. They fled from shame and humiliation. I haven’t seen them since.”

The RSF raped Hawa's daughters in front of her
Image:
The RSF raped Hawa’s daughters in front of her

Dr Afaf Ishaq, the camp director and emergency response room (EER) volunteer, is sobbing nearby.

“I have dealt with thousands and thousands of cases, I am on the verge of a mental breakdown,” she says.

“Sometimes in the morning, I have my tea and forget that I need to eat or how to function. I just sit listening to testimony after testimony in my head and feel like I am hallucinating.”

Everyone we speak to points to her as a source of relief and help, but Dr Ishaq is largely carrying the burden alone. When haphazard financial support for the ERR community kitchens ends, she says people flock to her complaining of hunger.

Dr Ishaq lives in the camp by herself after fleeing her home in Khartoum at the start of the war in April 2023. She says she quickly escaped after her husband joined the RSF.

Dr Afaf Ishaq has seen thousands of cases of violence and sexual violence
Image:
Dr Afaf Ishaq has seen thousands of cases of violence and sexual violence

Since then, she has been constantly reminded of the atrocities committed by her husband’s ranks in Khartoum, her hometown Al Fashir and the ethnic violence they are carrying out across the region.

“The RSF focuses on ethnicity,” she says. “If you are from the Zaghawa, Massalit, Fur – from Darfuri tribes – you should be killed, you should be raped.

“If they find that your mother or father are from another tribe like Rizeigat or Mahamid – they won’t rape you, they won’t touch you.”

The RSF has besieged Al Fashir for 16 months. File pic: Reuters
Image:
The RSF has besieged Al Fashir for 16 months. File pic: Reuters

A message for the West

In January, the Biden administration determined that the RSF are carrying out genocide in Darfur, 20 years after former US secretary of state Colin Powell made the declaration in 2004.

But the designation has done little to quell the violence.

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Sudan’s government has accused the United Arab Emirates (UAE) of supplying arms and logistical support to the RSF. The UAE denies these claims but many on the ground in Darfur say its role in this war is accepted as fact.

The silence from the UAE’s allies in the West, including the UK and US, is felt loudly here – punctuated by gunfire and daily bombs.

Dr Ishaq fled her home in Khartoum at the start of the war after her husband joined the RSF
Image:
Dr Ishaq fled her home in Khartoum at the start of the war after her husband joined the RSF

Dr Ishaq’s distress ratches up when I ask her about neglect from the international community.

“I direct my blame to the international community. How can they speak of human rights and ignore what is happening here?

“Where is the humanity?”

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