TAX REFORM 2026: ITS CONSEQUENCES

Abstract

The 2026 tax reform was the most significant tax reform in the last 25 years, particularly for small businesses. Starting in 2025, simplified taxpayers became VAT payers with income exceeding 60 million rubles for the previous year, at special rates: 5% and 7% without deduction, and 20% with deduction. Starting in 2026, the standard VAT rate will increase from 20% to 22%, the income threshold for VAT payment under the simplified tax system and the patent tax system will be significantly reduced (from 60 million to 20 million rubles), and preferential insurance premium rates for SMEs will be abolished. The objective of the study is to analyze the impact of the proposed changes on the financial position of businesses, including small businesses, and on the budget. The study utilizes methods of analysis and synthesis, comparison, generalization, and tabulation. The study draws on federal laws, official Rosstat data, Federal Tax Service reports on the tax base and accrual structure under special tax regimes, and relevant publications. The study found that the proposed changes are aimed at increasing federal budget revenues. The increased tax burden on businesses, including small businesses, will lead to higher prices for products, goods, and services, and consequently, will increase inflation, which will ultimately impact household income.