Denis Maksimov asked Vladimir Putin for assistance while standing in front of his bakery in Kraskovo, a sleepy working-class town east of Moscow with modest storefronts and long winters. He looked straight into a camera. The smell of bread came from the bakery behind him, named Mashenka after his oldest daughter. For eight years, it had. He doubted it would last much longer.
According to Maksimov, his tax bill had increased by about 35 times. Not thirty-five percent. 35 times. For anyone earning more than a recently reduced revenue threshold, the patent taxation system he had been using since opening—a fixed annual payment, typically only tens of thousands of rubles—was being phased out. A 6 percent revenue tax plus VAT will take its place. The math doesn’t work for a small bakery that counts paper clips to stay afloat while operating on narrow profit margins. There’s a chance that optimism alone won’t make it work.
| Field | Details |
|---|---|
| Business Owner | Denis V. Maksimov |
| Business Name | Mashenka Bakery (named after his eldest daughter) |
| Location | Kraskovo, suburban city east of Moscow, Russia |
| Number of Locations | 3 bakeries in the Moscow region |
| Tax System Previously Used | Patent taxation system — fixed annual payments for 8 years |
| Tax Increase Faced | Approximately 3,500% (35-fold increase) |
| VAT Change (Russia-wide) | Raised from 20% to 22% from January 1, 2026 |
| New VAT Revenue Threshold | Lowered to 20M rubles (~$261,000) in 2026; drops to 10M rubles by 2028 |
| Key Political Moment | Maksimov appeared on Putin’s annual live call-in show, December 2025 |
| Broader Context | Russia’s war in Ukraine entering its 4th year; oil revenues declining, budget deficit rising |
His appeal garnered attention when it was aired on Putin’s yearly call-in show in December 2025. Clients arrived. Mashenka even sent the Kremlin a basket filled with baked goods. The story—the modest baker, the strong leader, the bread as a sort of offering—had an almost fable-like quality for a few weeks. However, the tax code remained unchanged. Eventually, the clients stopped coming. By early 2026, Maksimov had returned to his original position, but he had now declared on national television that a lot of businesses would close.
As you watch all of this, you get the impression that Mashenka’s problems are more than just one bakery. It’s an outward sign of a much deeper strain on the Russian economy. Revenues from oil are declining. The deficit in the budget has increased. There is a gap that needs to be filled because military spending, which previously appeared to be a growth engine, has leveled off. Someone is the small business owner, according to the Kremlin. Beginning on January 1, 2026, the value-added tax was increased from 20 to 22 percent, and the annual revenue threshold for paying it was lowered from 60 million rubles to 20 million this year, with a target of 10 million by 2028. Almost immediately, suppliers made adjustments and passed on their own higher costs downstream.
Reporters were informed by St. Petersburg beauty salon chain owner Darya Demchenko that she had never felt so vulnerable. Social media footage from Russia’s second city’s grand, tourist-facing main street, Nevsky Prospekt, showed storefront after storefront that had simply closed. Reading about economic pressure in a government report is one thing. Seeing an empty window where a business once stood is quite another.
At a government meeting, Putin stated that companies should pay taxes but that “production businesses should not face difficulties.” It’s a peculiarly cautious distinction that begs the question of whether the Kremlin fully comprehends—or chooses to comprehend—what’s truly happening to the people it taxes. At that same meeting, Maksimov’s case was brought up, and the minister of economy acknowledged it. Nothing was altered.
Even though 3,500 percent is a startling figure, there are other aspects of the Mashenka story that are noteworthy. It’s the regularity of the company being asked to take it on. Three bakeries. The majority of people outside of Russia are unaware of this town. A father named his business after his daughter. There is no corporate mismanagement, no fraud, and no dramatic villain. Simply put, there has been a four-year war, and the government is increasingly taking money out of the pockets of those who work as bread makers.
It’s still unclear if Mashenka survives. The Kremlin may not be prepared to provide an honest response to the more difficult and uncomfortable question of whether enough companies like it will endure to maintain Russia’s domestic economy.
