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Kremlin Tightens Grip On Businesses To Boost War Funding, Intelligence Says

New tax controls and regulatory pressure are pushing companies to raise prices, cut jobs and move further into the shadow economy.

Kyiv Post

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2026年3月28日

3 min read

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Russia is ramping up pressure on its domestic business sector in an effort to generate additional funding for its war against Ukraine, according to Ukrainian intelligence.

The measures, presented as a crackdown on the shadow economy, reflect growing fiscal strain inside Russia as the government seeks new revenue sources.

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New fiscal measures target businesses

According to Ukraine’s Foreign Intelligence Service, the Kremlin has introduced a range of new control mechanisms aimed at increasing state revenues.

These include advance value-added tax (VAT) payments, stricter verification systems for importers, licensing requirements for tobacco trade and criminal liability for cryptocurrency mining.

Authorities are also focusing on monitoring cash circulation, informal employment and the gold market.

Russia’s Finance Ministry estimates the measures could generate between $7.6 billion and $10 billion annually, though analysts consider the estimates to be overstated.

Corporate sector under strain

The campaign comes as Russia’s corporate sector faces mounting financial pressure.

Official statistics show that the share of loss-making companies rose to 27.1% in 2025, up from 25.5% a year earlier, while total losses increased by 7.5%.

Intelligence officials say the deteriorating business environment has reduced tax revenues, prompting the government to intensify oversight and enforcement.

Businesses respond with price hikes, closures

Russian businesses have reacted by raising prices, cutting staff and reducing investment.

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Some companies are also moving further into the shadow economy to avoid increased scrutiny and taxation.

In Russia’s Far East, up to 36% of entrepreneurs are considering shutting down their businesses, reflecting growing uncertainty and financial pressure.

Banking data also indicates stagnation in cashless payments following a VAT increase to 22%, with many businesses shifting toward cash transactions.

Kremlin seeks additional war funding

Ukrainian intelligence says the broader goal of the campaign is to secure additional resources for Russia’s war effort.

The Kremlin has been searching for new revenue streams as military spending continues to rise, placing further strain on the state budget.

Russian President Vladimir Putin has also urged Russia’s business elite to make “voluntary contributions” to support the war effort.

The proposal was reportedly discussed during a closed-door meeting with oligarchs, where the Kremlin made clear it intends to continue the war in Ukraine.

Several business figures are said to have agreed to the initiative.

Analysts warn that increased pressure on businesses may ultimately undermine Russia’s tax base, as more economic activity shifts into informal channels.

Economic pressure risks long-term impact

Experts say the aggressive fiscal measures risk accelerating structural weaknesses in Russia’s economy.

As businesses face tighter controls and higher costs, the shift toward informal economic activity could reduce overall tax collection.

Ukrainian intelligence assesses that the Kremlin’s strategy may provide short-term gains but could further erode the economic foundations needed to sustain long-term war financing.