Nearly all Russian small and medium-sized enterprises say business conditions have deteriorated since last year, with mass closures now seen as inevitable following sweeping tax changes that took effect in 2026, an Opora Russia survey announced on March 24.

Some 94.7% of the 3,478 respondents across 86 regions reported conditions had worsened compared with 2025, with more than three-quarters describing the deterioration as significant. Some 68.7% reported falling revenues in early 2026, while nearly 45% ended 2025 without a profit.

The survey focused on micro-enterprises with annual turnover of RUB20mn-60mn ($220,000-$660,000), the category that became liable for VAT from 2026 under tax code amendments passed in November 2025.

The VAT threshold will fall further to RUB15mn in 2027 and RUB10mn in 2028. Reduced social insurance contribution rates for SMEs were also abolished, except in select sectors.

Around 5.5% of respondents said they had already ceased trading. Only 23.7% were certain they would continue operating, while 18.2% put their chances of survival at 30% or below.

Sergei Borisov, deputy chairman of the public council at the Federal Tax Service, forecast that around a third of all SMEs would close in the near term.

Opora Russia president Alexander Kalinin said businesses had been forced to cut staff and production costs, and that closures and restructurings were unavoidable. Some 82.7% of respondents had raised prices, with more than half increasing them by up to 20%, but only 7.6% said they had managed to pass on cost increases while maintaining profitability.

The shadow economy expanded across sectors, with 69.5% of vehicle repair businesses, 65.9% of beauty firms and 58.6% of hotels reporting a rise in informal activity. Some 3.6% of respondents admitted to using business-splitting schemes to reduce tax exposure, while a further 19.6% were considering doing so.

Automated simplified taxation, which does not require VAT payments, saw an 11.5% rise in uptake as businesses sought legal ways to reduce their burden.

"The combination of falling demand, shrinking margins, rising mandatory costs and heavier tax administration is leading entrepreneurs to question not just their current position but their ability to continue in the medium term," said Susana Kirakosyan of the Chamber of Commerce and Industry.