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Delovaya Rossiya has submitted more than 50 economic reform proposals to Russian authorities, including ending several tax benefits used by small businesses and sole proprietors. The measures remain proposals under government review; the Finance Ministry says they need further study.
Delovaya Rossiya, one of Russia’s largest business associations, has proposed ending several tax breaks used by small businesses and sole proprietors, including eliminating two simplified-tax options from 2027. The proposals have been sent to government agencies for review, but no decision to adopt them has been announced.
The association submitted more than 50 economic reform proposals, RBC reported. Among them are abolishing the “income” option under Russia’s simplified tax system (USN) and the automated simplified tax system (AvtoUSN, or AutoUSN) as early as 2027. Under the current income-based options, businesses pay tax on total revenue at a rate of 6% under USN or 8% under AvtoUSN.
Delovaya Rossiya also proposes a uniform VAT threshold of 20 million rubles in revenue from the previous calendar year across special tax regimes, including AvtoUSN. The current AvtoUSN threshold is 60 million rubles. Other proposals would remove regional governments’ discretion to lower USN rates, abolish the patent tax system, and impose taxes on gifts and inheritances. The association proposes exempting shares in publicly traded companies from inheritance and gift taxes.
Yevgeniya Memruk, head of the Union of Accountants and Tax Consultants, told RBC that the income-based options are used by smaller firms with high margins and revenues of 10 million to 20 million rubles. She warned that moving to other regimes could make their tax base at least 2.5 times larger, potentially making some businesses unprofitable. Memruk said eliminating the patent system would affect entrepreneurs in trucking, independent retail and personal and household services. She also noted that nearly 3.5 million entrepreneurs use USN and about 1.5 million use the patent system.
Tax Changes Could Reach Millions
If adopted, the proposals could change the tax liabilities and operating choices of a substantial number of Russian small businesses. A uniform VAT threshold would remove the higher revenue limit currently available under AvtoUSN, while ending income-based tax options could leave some firms facing a larger taxable base, according to Memruk’s assessment to RBC.
The effects would not be limited to individual tax bills. Regional authorities can currently reduce USN rates to attract or retain businesses; removing that power could weaken a tool they use to compete for investment. Abolishing the patent system would also affect entrepreneurs whose tax is currently calculated as a fixed amount based on assumed income. The scale of any actual impact would depend on the final policy and how businesses could move between regimes.
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The Regimes Under Review
Russia’s special tax systems offer eligible businesses alternatives to standard taxation. Under the USN income option, tax is charged on revenue; another USN option taxes income after expenses. Regional governments can currently reduce the respective rates from 6% to as low as 1%, and from 15% to as low as 5%. The patent system instead lets qualifying sole proprietors pay a fixed tax calculated from state-assumed income.
The VAT proposal comes as AvtoUSN has attracted businesses following a reduction in the threshold for firms using the regular USN. Sberbank said earlier this year that the number of its individual entrepreneur and corporate clients on AvtoUSN had risen sixfold in one month. The source report does not provide a comparison period beyond that month or further details on the underlying client totals. The patent system’s eligibility threshold is already scheduled to decline from 20 million rubles in 2026 to 10 million by 2028.
Delovaya Rossiya argues that special regimes can be abused, including through artificial business splitting or workers being presented as self-employed to reduce taxes. The association’s chairman, Alexey Repik, said that companies pretending to be small businesses distort competition. Memruk acknowledged that abuses exist but argued that the proposals target systems widely used in good faith, rather than only offenders.
“The regimes themselves, which most small businesses use in good faith”
— Yevgeniya Memruk, head of the Union of Accountants and Tax Consultants, speaking to RBC
Approval and Final Terms Remain Unknown
The proposals are not law, and it is not clear which, if any, the government will take forward. The Finance Ministry told RBC that they require further study. The available reporting does not specify a government timetable, whether officials will recommend revisions, or how the proposed measures would be implemented if approved.
The source report says Delovaya Rossiya’s reform program is due to be presented at its October 15 forum, which President Vladimir Putin is also expected to attend. It does not establish that Putin or the government supports the proposals. Nor does it provide a complete estimate of their effects on small-business costs, regional revenues or consumer prices.
Government Review and Forum Presentation
Delovaya Rossiya is expected to present its reform program at the October 15 forum, and the proposals are already with relevant government agencies for review. The Finance Ministry has said further study is needed. The next concrete developments to watch are any ministry conclusions, government response or published changes to the proposals; until then, the tax measures remain recommendations rather than adopted policy.
Key Questions
Has Russia approved the proposed tax changes?
No. Delovaya Rossiya has submitted proposals for review, and the Finance Ministry said they require further study. The source report does not say that the government has adopted them.
Which small-business tax options could be removed?
The association proposes ending the USN and AvtoUSN income-based options as early as 2027, and abolishing the patent tax system. These are proposals, not confirmed changes to current law.
What VAT change is being proposed?
Delovaya Rossiya proposes requiring VAT payment when revenue exceeded 20 million rubles in the previous calendar year, across special regimes including AvtoUSN. AvtoUSN currently has a 60 million ruble threshold, according to the source report.
Why does the association support the changes?
Delovaya Rossiya says some businesses misuse special tax regimes, including by artificially splitting businesses or misrepresenting workers’ status. Experts cited by RBC say abuse is a real issue but warn that broad changes could also affect firms using the regimes legitimately.
When could the proposals take effect?
The association proposes some changes, including ending two income-based options and setting a uniform VAT threshold, from 2027. No implementation date has been approved, and the proposals could be revised or rejected.
Source: rss
