Russia's 2026 tax reforms test cashless dominance in retail spending

The Central Bank of Russia has not yet observed a shift from cashless to cash payments following the tax law changes that took effect on January 1, 2026, a senior official said.

Alla Bakina, head of the Bank of Russia's National Payment System Department, told journalists on the sidelines of the T-Bank Talk Forum that no such trend had been detected in the first two months of the quarter, which had just ended.

"Over the first two months of the quarter—since the quarter has only just concluded—we haven't seen any such trends. It may simply be too early to tell; we will continue monitoring," Bakina said.

The changes include an increase in the standard VAT rate from 20% to 22% as of this year. The revenue threshold for small businesses on the simplified tax system—beyond which they become liable for VAT—has also been lowered to 20 million rubles. Additionally, as of January 1, VAT exemptions were abolished for bank card servicing, as well as for processing and acquiring services.

In mid-February, Bank of Russia Governor Elvira Nabiullina cautioned that it was premature to assess the potential impact of the tax reforms on payment structures or the risk of businesses moving into the shadow economy. "The tax changes took effect on January 1, and at this point, we simply lack the data to make any judgments. We will track, monitor, and analyze the situation before drawing conclusions. But for now, it's too soon," she said.

According to Interfax, cashless payments accounted for 88% of retail turnover in 2025, up 2.2 percentage points from the previous year.