From bakeries to beauty shops, Russian businesses are feeling the pain from a new wartime tax policy - AP News
AP News
February 23, 2026
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Russian businesses, ranging from small bakeries to local beauty shops, are grappling with significant financial strain due to a new wartime tax policy introduced by the government. This policy has led to higher taxes and reduced access to financial systems, forcing many businesses to reconsider their operations or even close down. The impact is particularly felt by small and medium-sized enterprises, which form the backbone of Russia's economy and employ a large portion of the workforce.
The new tax measures are part of broader economic adjustments aimed at supporting military efforts, but they have created unintended consequences for civilian businesses. Many business owners report difficulty in meeting increased tax obligations while managing rising costs of goods and labor. This has led to layoffs, reduced working hours, and, in some cases, bankruptcy filings. The government has provided limited support, leaving many businesses struggling to stay afloat.
The situation highlights the delicate balance between funding wartime initiatives and maintaining economic stability at home. While the policy's intent is to bolster national defense, its implementation has sparked widespread criticism and concern among business communities. Experts warn that the long-term effects on Russia's economy could be severe, potentially leading to higher inflation rates and further deterioration of living standards for ordinary citizens.
This issue is not only important for those directly affected by the tax changes but also carries broader implications for global markets and international relations. The economic challenges faced by Russian businesses underscore the complex interplay between wartime policies and domestic economic health, offering insights into how similar measures might impact other nations in times of conflict.
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Originally published on AP News on 2/23/2026