Kremlin backtracks on VAT reform as Putin urges Duma to delay lowering Russia’s small-business tax threshold

Source: Interfax

Vladimir Putin called for postponing further reductions to the revenue threshold above which small businesses must pay VAT, announcing the proposal at a plenary session of the St. Petersburg International Economic Forum.

The threshold for businesses operating under the simplified tax system was already lowered to 20 million rubles starting in 2026, and under existing plans it was set to fall to 15 million rubles in 2027 and 10 million rubles in 2028.

Putin said the issue had been discussed in detail with business representatives and government officials. “I believe it is possible to delay the planned further reduction of the revenue threshold. […] And to fix it at its current level. I won’t name a specific date, but the further out, probably, the better,” he said.

Putin asked the government and the State Duma to introduce the necessary amendments.

In November 2025, Putin signed a law that would gradually lower the value-added tax threshold for small businesses operating under the simplified tax regime. The law stipulated that starting in 2026, the threshold would drop to 20 million rubles — the level at which businesses become liable for the tax — then to 15 million rubles in 2027 and 10 million rubles in 2028. Previously, the threshold had been 60 million rubles per year.

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Kremlin backtracks on VAT reform as Putin urges Duma to delay lowering Russia’s small-business tax threshold

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