As part of its 2026–2028 budget plan, the Russian government is preparing to raise the standard value-added tax (VAT) rate from 20% to 22%. The move is aimed at addressing the growing budget deficit, largely driven by increased defense and social spending.
In parallel, officials are discussing targeted tax relief for small businesses. According to sources cited by RBC, one proposal would allow companies using the simplified taxation system (USN) to remain exempt from VAT if their annual revenue stays below ₽30 million. Currently, the threshold stands at ₽60 million, but under new legislation passed in its first reading by the State Duma, it is set to drop to ₽10 million from 2026.
Alexander Shokhin, head of the Russian Union of Industrialists and Entrepreneurs (RSPP), has publicly advocated for maintaining VAT exemptions for small enterprises. The proposed changes aim to balance fiscal consolidation with support for entrepreneurship, though critics warn that lowering the threshold could increase the tax burden on small firms and reduce their competitiveness.
The final decision is expected later this year as part of broader amendments to Russia’s Tax Code.
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