By 2029 the fate of the Individual Entrepreneur IP in Russia could be sealed, according to a front-line view shared in an interview with ura.ru by Artem Kiryanov the Deputy Chairman of the State Duma Committee on Economic Policy. The message is clear: the self-employed tax regime is planned to run its course within the set timeframe, and when that moment arrives small and microbusiness owners will need to choose a new taxation model in order to keep operating legally and efficiently.
Kiryanov argues that the IP designation represents a tax and business structure that reflected an earlier period, a model shaped by conditions from thirty years ago. As economic realities shift and policy goals adjust, the current framework risks becoming less fitting for today’s needs. The implication is not that the IP concept will suddenly disappear, but that its relevance could wane as the regulatory landscape evolves and new approaches to business support emerge.
The discussion also touches on a practical consequence for self-employed operators: as earnings rise, some ventures may become more profitable and, with that, more capable of transitioning into formal corporate settings. In such cases a founder or a small business owner might shift toward roles as directors of a registered entity or establish a formal company with its own governance and administrative responsibilities. This path aligns with a broader corporate framework and can unlock advantages that are harder to access for sole proprietors.
At the moment the self-employed benefit from a tax regime that imposes 4 percent on personal income and 6 percent on corporate-like arrangements for individuals and entities alike. By comparison, larger business forms such as public joint stock companies PJSCs, joint-stock companies JSCs, LLCs and similar structures face a 20 percent tax obligation on income. The gap highlights how different business forms are taxed under the Russian system and helps explain why a growing number of small operators consider moving to a more formal corporate arrangement as their earnings advance.
From a historical lens, tax authorities have tracked the number of self-employed citizens as part of ongoing efforts to map the impact of this regime on the economy. The policy landscape continues to shift with potential reforms or even a complete discontinuation of the IP model, signaling a broader move toward alternative taxation methods and business configurations better suited to current growth ambitions and economic realities. The central question for policymakers centers on balancing the ease of use and incentives for small entrepreneurs with the state’s administrative efficiency and revenue objectives, all while ensuring fair competition for participants in the market. Any transition would need to be carefully planned to minimize disruption for current IP users while offering clear, practical pathways to continued compliance and ongoing business success. This discussion reflects a broader strategic debate about how to sustain entrepreneurial vitality while modernizing the taxation system. Source notes ura.ru