Business will go bankrupt: experts on the effect of tax increases in St. Petersburg

In the Northern capital proposed to increase the tax rate for most entrepreneurs working under the simplified taxation system (USN). According to the calculations of parliamentarians, thanks to this, the city budget will be able to additionally receive about 20 billion rubles a year. However, experts who spoke to MK in St. Petersburg believe that in the medium term, St. Petersburg may lose many taxpayers.

As reported in the Legislative Assembly of St. Petersburg on November 9, according to the proposed bill, instead of the current 7%, entrepreneurs will pay 15% under the “income minus expenses” scheme.

“We need to find a middle ground, a balance: on the one hand, to give tools to business for development, and on the other hand, to ensure long-term revenues of the city budget,” the head of the budget and financial committee of the Legislative Assembly, the author of the famous “law on pouring” Denis Chetyrbok, was quoted as saying by the media.

The rate of 7% is proposed to be retained only for the manufacturing industry and organizations engaged in scientific research. For IT and small technology companies, they want to keep the rate at 1% and 5%, respectively.

According to the draft budget for 2027, the city plans to receive 120.7 billion rubles from USN enterprises. This, as noted by journalists writing about the economy of the media, almost 20% more than in the adjusted version of the budget for 2026.

According to experts, with whom I spoke “MK in St. Petersburg”, not all small enterprises will be able to survive the innovation.

According to the doctor of economics, Professor Pavel Medvedev, the initiative has a short-term logic. The budget turned out to be in deficit, and the possibilities of replenishing it through borrowing seem exhausted. But in the medium term, which the expert estimates at about six months, the effect may be reversed.

“Business will go bankrupt. Those taxes, which are now poorly received, there will be no one to pay, Pavel Medvedev warns.

He also drew attention to the fact that St. Petersburg entrepreneurs work with suppliers from all over Russia, and the closure of companies in the Northern capital can provoke a chain reaction.

According to Artem Golubev, Associate Professor of the Department of Economics of RANEPA St. Petersburg, low-margin companies will be in the most vulnerable position.

“If the profitability of an enterprise is 40%, the tax increase will be unpleasant for it, but it will be experienced. With a margin of 10%, the tax burden will be very noticeable. And if the company earns even less, 7-8%, an increase in the tax rate can lead to loss, the expert explains.

According to Artem Golubev, reducing salary costs is risky: the metropolis has a low unemployment rate, and it will be difficult to find a replacement for the departed employees. Suppliers are unlikely to go for serious discounts. Small businesses are already struggling. The pressure on the sector, according to the expert, increased after the lowering of the VAT threshold. A weak demand does not add optimism.

“The clouds have long been hanging over small businesses. They close shops in half-empty shopping centers. Some entrepreneurs are already leaving for delivery. Those who will be able to survive in the next couple of years are great people, Artem Golubev sums up.

Experts do not give direct promises to increase the cost of services and goods for consumers. But the logic is obvious: rising costs for small cafes, salons and workshops can affect price tags. The fight for survival is about jobs. Business, according to the forecast of Artem Golubev, will look for any ways to optimize processes and costs, but the resource for maneuvering is limited for most.