Breaking News: Challenges for Russian Small Businesses
Vladimir Putin has prioritized supporting small and medium-sized businesses, even during wartime. However, these businesses are facing significant challenges this year.
In January, the Value Added Tax (VAT) increased from 20% to 22%. This change aimed to fund defense efforts and resulted in the removal of tax breaks for some companies.
According to Kontur.Fokus, 209,000 small and medium-sized businesses closed in the first quarter of 2026, a 9% increase compared to the same period in 2025.
Internet shutdowns and restrictions on messaging apps have further complicated the situation. In March, businesses in Moscow reportedly lost tens of millions of dollars in just one week.
A fuel crisis has also emerged, linked to Ukrainian attacks on oil infrastructure. Experts warn that the cumulative effects of these events are detrimental to the business landscape.
Despite past resilience, small businesses are now contending with high inflation, a widening budget deficit, and a 23% drop in oil and gas revenues compared to the previous year.
Russia has substantial financial reserves, but the ongoing conflict in Ukraine is increasingly impacting the civilian economy.
