Russian small and medium-sized businesses during coronavirus crisis

Recently, the Russian government’s policy aimed at developing the small and medium-sized enterprise (SME) sector has included: the implementation of a reform of control and oversight activities; simplification of registration procedures for legal entities and individual entrepreneurs; digitalization of tax authorities; introduction of a tax maneuver for IT companies; expansion of support infrastructure facilities, etc. However, the contribution of SMEs to the economy remains modest compared to developed countries, and the sector’s performance deteriorated over the past two years. In 2021, the pandemic-induced harsh conditions for small businesses were: decreasing income, anti-epidemiological measures (lockdown in November, introduction of QR codes, masking regime, etc.). A considerable part of Russian small business belongs to the spheres that were among the most affected ones: retail trade in non-food products, provision of household services, and public catering. The coronavirus-induced crisis is unique in the scale of the imposed restrictions, due to the high contagiousness of the new infection and its duration. The situation is accentuated by the recurrence of morbidity waves, the emergence of new strains of the virus, and, consequently, the uncertainty of the end date and unpredictability of entrepreneurial risks.