Value Added Tax Reform and Its Impact on the Business Environment in Russia

Value-added tax (VAT) is a key tax contributor to federal budget revenues (VAT accounts for 29,5% of non-oil and gas federal budget revenues for 2025). This tax has been subject to ongoing reforms from 1992, when it was introduced, until 2025, when a significant new reform took place. These changes primarily involve changes in tax rates, limiting or expanding the scope of VAT payers, and the mechanisms for calculating and paying this tax. The latest reform, the results of which are already visible in 2026, has, according to many experts, negatively impacted the business environment in Russia, significantly expanding the scope of payers, even taking into account the possible application of reduced rates for small businesses. The purpose of this article is to assess the impact of VAT reforms in recent years on the business environment in Russia. The article analyzes changes in the VAT calculation mechanism that have been made in recent years and earlier, as well as current trends reflecting the development of the business environment in the Russian Federation in 2025-2026, the attitude in the business environment (among SMEs) to the VAT reforms that have been carried out relatively recently.