Russia's ongoing economic challenges, driven by wartime expenses and declining oil revenues, have led the government to implement significant tax hikes, including an increase in the value-added tax (VAT) from 20% to 22%, effective January 1, 2026. These measures aim to bolster the fiscal budget amid a backdrop of economic decline, with projected growth of only 1% this year after previous growth exceeding 4%. The legislation also plans to lower the VAT registration threshold from 60 million rubles to just 10 million rubles by 2028, impacting small and medium-sized businesses such as convenience stores and beauty salons, while targeting tax avoidance schemes.