Russia's 2026 budget reveals tax wins and revenue declines in Q1
Tax Revenues from Special Regimes Plunge 22.2% in Q1 2026
In the first quarter of 2026, combined tax revenues to Russia's consolidated budget from businesses and individuals under special tax regimes fell by 22.2% year-on-year. Meanwhile, collections from value-added tax (VAT) rose by 10.3%, corporate profit tax by 1.9%, mineral extraction tax by 15.2%, and property tax by 3.9%.
From January to March 2026, total tax revenues from businesses and individuals on special regimes declined by 22.2% compared to the same period in 2025, Vedomosti reported, citing a presentation by Elena Lebedinskaya, director of the Russian Finance Ministry's Revenue Department, delivered at the Vasilyev Readings conference on April 23.
Other tax categories showed positive growth over the three-month period. VAT revenues increased by 10.3%, corporate profit tax by 1.9%, mineral extraction tax by 15.2%, and property tax by 3.9%. The ministry did not provide absolute figures.
According to the Federal Tax Service (FTS), tax revenues from special regimes in Q1 2026 dropped by 16% to 537.2 billion rubles (down from 639.9 billion rubles in 2025). However, revenues from the simplified tax system for self-employed individuals (auto-UST), tracked separately, surged nearly fiftyfold to 41.9 billion rubles (compared to 850.7 million rubles the previous year).
In the first three months of 2026, federal budget revenues fell by 8.2% year-on-year to 8.3 trillion rubles (down from 9 trillion rubles in 2025), the Finance Ministry reported in early April. Expenditures rose by 17% to 12.9 trillion rubles, resulting in a deficit of 4.6 trillion rubles—exceeding the planned 3.8 trillion rubles.
Yevgenia Memruk, chair of the Union of Accountants and Tax Consultants, told Vedomosti that while the decline in tax revenues from businesses on special regimes is concerning, an analysis of FTS reports suggests that roughly half of the shortfall stems from tax redistribution following last year's amendments to the Tax Code—not from businesses moving into the shadow economy or shutting down.
On January 1, 2026, Russia raised its VAT rate from 20% to 22%. President Vladimir Putin has expressed hope that the increase will be temporary, framing the measure as a step toward "reducing the tax burden in the future."
Additionally, as of January 1, companies under the simplified tax system (UST) with annual revenues exceeding 20 million rubles are now required to pay VAT. Previously, the threshold for VAT liability was 60 million rubles. The changes, enshrined in the Tax Code, will see the revenue threshold gradually lowered: to 20 million rubles in 2026, 15 million in 2027, and 10 million in 2028.
