The High Cost of Putin's Tax Reforms: Small Businesses Struggle in Russia

Denis Maksimov, a bakery owner in suburban Moscow, rose to prominence after addressing Russian President Vladimir Putin on his annual call-in show. Maksimov's plea highlighted the severe impact heavy tax reforms are having on small businesses, including his own Mashenka bakery.

The economic strain on Russia is evident as oil revenues fall and the budget deficit grows, prompting the Kremlin to place financial pressure on small companies. Maksimov's request to reconsider tax thresholds and VAT rates for small businesses is shared by numerous entrepreneurs across the country who are facing increased operational costs and diminishing revenues.

Business owners like Darya Demchenko, who runs beauty salons, report skyrocketing expenses and declining customer demand, driving some to shutter their businesses entirely. Despite Maksimov's brief success in gaining publicity, the outlook remains grim for many, with predictions suggesting a wave of bankruptcies and withdrawals from the market.