Russianbusinesses face a punitive new tax measure as desperateVladimir Putinscrambles to recoup money lost in oil revenues. As the full-scaleinvasion of Ukraine marks four years, the mounting pressure on Russia’s economy is starting to show. Oil revenues are dwindling, the budget deficit is up, and military spending that fuelled robust growth has levelled off.

Russian oil and gas revenues in 2025 dropped to a five-year lowamid declining gas exports due to Western sanctions and falling crude oil prices, it has been reported. The Institute for the Study of War (ISW) highlighted that the Russian Ministry of Finance stated that the country's federal budget received a total of 8.48trillion rubles (around £80.5billion) in oil and gas taxes in 2025, which Bloomberg noted was a decrease of 24% compared to 2024. Consumers andbusinesses are now paying the price, as VAT has been raised by 2% and revenue thresholds for requiring businesses to pay it have been lowered drastically. The tax reform lowered the threshold for requiring businesses to pay VAT from 60 million rubles in annual sales revenue, to 20 million rubles (£191,000) this year and to 10 million rubles (£95,000) by 2028.

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The revenue threshold was similarly lowered for those using the "patent taxation system", in which small businesses made fixed annual payments - usually only tens of thousands of rubles - instead of a percentage of their revenues or profits.

This year, those whose revenues exceed 20 million rubles would need to pay at least a 6% tax on their revenues, and at least a 5% VAT.

Despite this, Putin maintains that "companies should not, in any way, suffer with the transition to the new tax system".

Darya Demchenko, who owns a chain of beauty salons in St Petersburg, said she had to close one and sell another to stay afloat due to thedramatically increased taxes and other costs, as well as lagging demand.

She told AP News: "I’ve never felt so scared as this year, so unprotected, so anxious... This year, we haven’t felt any support at all. We feel like they want to shut us down."

Bakery owner Denis Maksimov, who pleaded with Putin via video to look into new tax reforms, also warned that"many" businesses will shut down.

Source: Daily Express :: World Feed