Business closures in Russia’s beauty services sector jumped 52.5% to 12,300 between January and July compared with the same period last year, according to calculations the data firm Kontur.Focus prepared for the Russian business daily Kommersant.
New business registrations in the sector fell 16.1% to 13,000 over the same period.
Igor Stoyanov, founder of the Persona salon chain, ties the trend to business owners shifting from the patent tax system to the value-added tax. The revenue threshold at which small businesses using the simplified tax system must start paying VAT used to be 60 million rubles. It has since been lowered. Stoyanov said the change has driven up the tax and administrative burden on small companies, pushing some owners to close shop.
Other business owners interviewed by Kommersant said opening a new business has become “almost impossible,” and that a salon model that turned a profit a year ago no longer “adds up” under the current tax rules.
In November 2025, Vladimir Putin signed a law raising the VAT rate from 20% to 22% and lowering the threshold for the simplified tax scheme from 60 million rubles. Under this law, the threshold was set to drop to 20 million rubles in 2026 (businesses already have to pay VAT starting from that amount), to 15 million rubles in 2027, and to 10 million rubles in 2028. In June, the president announced that further lowering of the revenue threshold at which small businesses must start paying VAT would be postponed.
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