In Russia, the war is expected to lead to mass closures of small and medium-sized businesses
Russia is preparing for a wave of mass closures of small and medium-sized businesses amid a worsening budget crisis caused by full-scale war and a sharp increase in government spending. Analysts predict that up to 30 per cent of companies in this sector may cease operations in the near future. This was reported by the Centre for Countering Disinformation at the National Security and Defence Council of Ukraine.
The main risk factors are the increase in value-added tax and restrictions on access to the simplified taxation system. The Russian authorities see these steps as a way to quickly fill the budget deficit amid rising military spending and economic stagnation.
Experts warn that in the short term, increased tax pressure may indeed provide additional revenue to the budget. At the same time, in the medium and long term, the state risks losing much more, as businesses that cease operations stop paying taxes and providing employment.
Against the backdrop of the war, analysts estimate that the Kremlin is once again choosing the easiest way to finance its expenditures, shifting the financial burden onto citizens and entrepreneurs. Despite official propaganda claims about the alleged stability of the economy and the successful overcoming of sanctions, the real state of the Russian economy is increasingly characterised by exhaustion, a decline in private initiative and a fall in business activity.
Experts emphasise that the further decline of small and medium-sized businesses could have systemic consequences for the Russian economy, particularly for regions where this sector is a key source of jobs and tax revenues.
Source and frustration of the CSD
CPA, NSDC, Russia, crisis
