State Duma Passes Bill Delaying VAT Tax Hikes for Small Businesses

June 24, 2026 Lawmakers in the Russian State Duma chamber. duma.gov.ru The State Duma on Wednesday passed a bill that would temporarily protect small businesses from a planned tax hike by freezing a key revenue threshold through 2029. Under the legislation, small businesses using Russia’s simplified tax system would only have to pay the national value-added tax (VAT) if their revenue exceeds 20 million rubles ($260,000). If passed in the upper-house Federation Council and signed into law, the delay would reverse a law signed by President Vladimir Putin in November that had ordered a gradual, year-by-year reduction of the VAT tax exemption threshold to pull more small businesses into the tax pool. Under that original plan, the revenue cutoff was set to drop to 20 million rubles in 2026, 15 million rubles in 2027 and 10 million rubles in 2028. However, earlier this month, Putin changed course and ordered the government to freeze the threshold at its current level to avoid placing an immediate burden on small businesses. With the new bill, which State Duma members introduced on June 9, the revenue threshold would drop to 15 million rubles in 2029, and then fall to 10 million rubles in 2030. Earlier, Forbes Russia noted the temporary relief specifically targets smaller companies using the simplified tax system. The bill does not, however, apply to businesses using Russia’s patent tax system, which is a specific, popular tax structure used by individual entrepreneurs, as well as small retail and service sector stores. Russia’s largest business lobby groups have called on the government to expand the legislation so that patent-system businesses receive the exact same three-year delay before the lower thresholds hit them. Read more about: State Duma , Business , Tax Sign up for our free weekly newsletter Our weekly newsletter contains a hand-picked selection of news, features, analysis and more from The Moscow Times. You will receive it in your mailbox every Friday. Never miss the latest news from Russia. Preview Subscribers agree to the Privacy Policy We sent a confirmation to your email. Please confirm your subscription. A Message from The Moscow Times: Dear readers, We are facing unprecedented challenges. Russia's Prosecutor General's Office has designated The Moscow Times as an "undesirable" organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a "foreign agent." These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work "discredits the decisions of the Russian leadership." We see things differently: we strive to provide accurate, unbiased reporting on Russia. We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help. Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and every contribution makes a significant impact. By supporting The Moscow Times, you're defending open, independent journalism in the face of repression. Thank you for standing with us. Once Monthly Annual Continue Not ready to support today? Remind me later. × Remind me next month Remind me Thank you! Your reminder is set. We will send you one reminder email a month from now. For details on the personal data we collect and how it is used, please see our Privacy Policy. Read more State Duma Passes VAT Exemption for Food Industry to Ease Wartime Tax Burden The legislation, if signed into law, would effectively roll back part of a government tax reform implemented in January, which raised the standard VAT... 2 Min read Most Russian Businesses Plan to Raise Prices as Tax Hike Looms – Survey The government's proposal to raise the VAT rate and lower the annual revenue threshold for VAT payments has put small businesses under pressure. 2 Min read opinion Tatyana Rybakova How the Kremlin Decided to Sacrifice Small Business to Pay for War Desperate to fund the war as the economy flags, the Kremlin is piling pressure on entrepreneurs. Here's the story of one man pondering his future. 4 Min read Russian Parliament Approves Return of State-Backed Microlenders to Mortgage Market Lawmakers had removed more than 30 microfinance organizations from the list of 47 authorized mortgage lenders in May 2024 to limit lending outside the... 1 Min read