Russian Small Businesses Under Threat of Closure

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Hello!

This is Maksim Poliakov from the independent outlet 7x7.

Russian entrepreneurs have launched a social media flash mob called “I/WE Are Mashenka.” “Mashenka” is a bakery chain from Lyubertsy whose owner appeared on Putin’s Direct Line in December 2025. The chain’s owner, Denis Maksimov, complained about the tax reform and the VAT increase. After his appeal to Putin, federal authorities helped Mashenka avoid paying value-added tax: the business was able to use a catering-sector tax benefit after raising salaries.

Seeing the special treatment granted to the Moscow-region entrepreneur, the St. Petersburg–based Association of Beauty Industry Enterprises launched an online campaign titled “I/WE Are Mashenka.” The group wants to draw the authorities’ attention to the problems facing small businesses as a result of the tax reform. In this letter, I will share the stories of regional entrepreneurs who joined the flash mob.

Estimated reading time: 7 minutes

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How the “I/WE Are Mashenka” flash mob began

The Association of Beauty Industry Enterprises announced the “I/WE Are Mashenka” flash mob on its VK page on January 23, 2026. The post says that “Mashenka is not alone” and that there are “hundreds of thousands of entrepreneurs across the country” in the same situation including owners of beauty salons, cafés, hairdressers, workshops, and clothing stores.

“The market can’t keep up when the rules change faster and more often than businesses can adapt. We want [the authorities] to see that Mashenka is not an isolated case. This is a systemic story that is unfolding right now,” the Association’s entrepreneurs wrote.

They added that small companies had taken out loans, signed long-term lease agreements, and paid taxes and now find themselves on the brink of closure because of changes to the tax system.

The tax reform came into force on January 1, 2026. It affected special tax regimes (the simplified and patent-based systems) that small and medium-sized businesses had used to receive tax breaks. As of early 2026, those benefits no longer exist.

The Association of Beauty Industry Enterprises asked entrepreneurs to share their stories using the hashtags #IWeAreMashenka and #WeAreAlsoMashenka. According to the organizers, the authorities will see the posts and pay attention to the difficulties faced by small businesses, while entrepreneurs themselves will feel less alone in their problems.

 

“Government, don’t help us — we’ll die on our own!”

A VK user with the nickname Gulnar Railevna joined the “I/WE Are Mashenka” flash mob. Gulnar sells Turkish-made men’s clothing in Nizhnekamsk (Republic of Tatarstan). She previously had two stores (one in a shopping mall and one at a market) but closed one of them in 2023. In 2026, changes to the tax system put her remaining store at risk of closure. Gulnar wrote that customers are asking whether she is “about to shut down too.” She answers “no,” but admits she doesn’t know how much longer she can hold on.

“Every day our government comes up with new laws, programs, and conditions that are practically impossible to withstand. This has become a pain and a problem not only for small entrepreneurs and sole proprietors who work honestly and pay taxes properly, but also for ordinary customers who prefer buying from real people rather than soulless marketplaces,” Gulnar wrote.

Another participant in the campaign is Irina Mikhina, the owner of a beauty salon in Tula and the founder of a beauty business academy. In her post, she said she had spent 20 years building her business, investing in it, expanding it, and “developing the beauty industry not in words, but in practice.” In her view, the tax reform hit not only small businesses, but “everyone who works transparently and thinks not in months, but years ahead.”

“In this situation, I am not going to sit on the sidelines. Together with other industry leaders, I will fight to the end and support the activities of the Association of Beauty Industry Entrepreneurs. We will write letters. We will raise the issue publicly. We will push for dialogue and for a revision of decisions that are destroying the service sector today,” Irina Mikhina wrote.

Another flash mob participant Evgeniya Gontar owns a butcher shop in the town of Tuchkovo near Moscow. It is a family business. Evgeniya works there along with her three daughters and her mother. The shop “fell off the patent system” and was transferred to an automated simplified taxation system, which increased the tax burden. In the comments under the organizers’ post, Gontar said that the new taxes would destroy their business by May 2026.

She also wrote that she had previously sent food to Russian soldiers fighting in Ukraine. In January 2026, she stopped doing so because she now has to pay a tax that, according to her, amounts to 70% of her margin.

“Thank you, dear government! How boring life was without you. Leave us alone! Don’t help us. We’ll die on our own!” she wrote under the campaign’s post.

 

Will the authorities listen to small businesses?

The “I/WE Are Mashenka” flash mob was supported by the LDPR party, which launched its own project, “We Are Also Mashenka,” almost entirely copying the grassroots initiative. LDPR suggested that entrepreneurs publish posts using one of the hashtags proposed by the Association of Beauty Industry Enterprises and send appeals to a Telegram bot belonging to LDPR leader Leonid Slutsky. The party promised to forward all appeals to Prime Minister Mikhail Mishustin so that ministers could develop support measures for small businesses.

Small business owners have been complaining about the new tax system since early November 2025, when the changes were still under discussion. In nearly three months, federal authorities have not proposed any support measures for entrepreneurs. Meanwhile, the success of the Mashenka bakery owner is a typical Russian example of targeted, case-by-case intervention where solving a problem requires getting into Putin’s line of sight.

“Here is the new gold standard of small business success — showmanship. All you need is to be in the right place at the right time! Congratulations to Mashenka bakery owner Denis Maksimov on his outstanding career leap: from complaining about VAT to the president to a ready-made development strategy with discounted rent, subsidies, and offers from political parties,” wrote the authors of the VK community for entrepreneurs Tochka Sborki Business.

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