Entrepreneurs Rebel as Russia Faces Business Closures 🚫

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Small and medium-sized entrepreneurs across Russia are announcing their closures due to rising taxes and falling demand amid inflation. Thousands of cafes, shops, bars, and delivery services have not survived the Russian government's tax reform and the worsening financial situation of Russians.
According to Baza, citing entrepreneurs, businesses have recently seen a noticeable decline in customer numbers. Rising prices for food, services, and basic goods are forcing Russians to economize and cut back on their usual spending habits.
People are visiting cafes and bars less often, cutting back on food delivery orders, and forgoing entertainment. Even a small price increase, necessary to cover business expenses, further discourages customers. This situation increases the dissatisfaction of entrepreneurs with the government of President Vladimir Putin. The situation was exacerbated by the tax reform. In an attempt to find additional sources of budget revenue amid declining energy export revenues, Russian authorities lowered the annual revenue threshold at which entrepreneurs can operate without paying VAT. The limit is now 20 million rubles per year, while previously it was approximately 60 million rubles. For small businesses, this means a sharp increase in the tax burden. Cafe and bar owners admit that operating on minimal profits or even breaking even has become the norm. However, new mandatory payments could completely deprive businesses of even these modest incomes. Nowadays, new posts and videos from small businesses are appearing daily on social media, announcing the closure of their businesses. "Customers, we have some very sad news for you. We've decided to close our branch in Irkutsk. I'll explain the reasons. The first reason is, of course, the new tax system, which will cost a lot of money. Right now, at the end of 2025 and the beginning of 2026, many small businesses are closing, and people are losing their jobs," the entrepreneur explains in one of these videos. Small businesses remain particularly vulnerable in the regions. There, entrepreneurs are finding it increasingly difficult to compete with large national chains, which have a financial cushion, access to loans, and the ability to negotiate more favorable lease and supply terms. As a result, independent cafes, shops, and delivery services are gradually being forced out of the market. Experts in Russia are sounding the alarm, noting that the mass closure of small businesses could lead not only to job losses but also to a further decline in business activity in the regions.
Media previously reported that 70% of entrepreneurs in Russia are preparing to raise prices to offset the hit to their income, while the rest intend to go underground.

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