New Delhi, Nov. 20 -- Russian lawmakers endorsed new tax hikes on Tuesday as Moscow looks for new revenue sources to boost its economy during its nearly four-year war with Ukraine.

Legislators in the lower house of parliament, the State Duma, approved the key second reading of a bill that will raise value-added tax from 20% to 22%. The changes are expected to add as much as 1 trillion rubles (about $12.3 billion) to the state budget.

The new legislation also lowers the threshold for businesses required to collect VAT from 60 million rubles (about $739,000) in annual sales revenue to 10 million rubles (about $123,000). The changes, which will be introduced in stages up to 2028, are designed to stop firms from dividing their operations to...