Taxes increase, stores close: small businesses feel the impact of the war and taxes in Russia
Small businesses in the Moscow area struggle with increased taxes and economic pressures as the war in Ukraine continues and essential revenues decline.
Denis Maksimov, the owner of Mashenka bakery near Moscow, gained attention after pleading for President Putin's review of new tax reforms during a televised Q&A session. This plea highlighted the burden of increased taxes on small businesses, which Maksimov fears could lead to widespread closures. Despite understanding the difficult circumstances facing the country, he expressed a bleak outlook for the future of his business and others in similar situations, lamenting that many will not survive the growing financial challenges.
The economic landscape in Russia is changing as it approaches the fourth anniversary of the large-scale invasion of Ukraine. The government's financial stability is facing threats, with diminishing oil revenue, an increased budget deficit, and escalating military expenditures due to ongoing commitments. These factors are adversely affecting local businesses, which are now grappling with a combination of decreased consumer spending and heightened operational costs, making it increasingly difficult for them to navigate their financial futures.
This situation raises significant concerns about the viability of small enterprises in Russia, revealing a dichotomy between government policies aimed at supporting national security and the dire reality of small business operations under heavy tax burdens. As the war continues, the real implications on the economy could lead to a broader economic decline, potentially causing social unrest should more businesses collapse and unemployment rise.