Russia counts more than 12 million self-employed people. In Moscow and St. Petersburg, one in four workers already operates under a special tax regime. Officials and business leaders warn that this trend could threaten the broader economy. Debate points to couriers, ride-hail drivers and other freelancers as contributors to staff shortages, proposing tax increases and new restrictions. What lies ahead for self-employment in the months ahead?
Oleg Korobchenko, the Tatarstan Minister of Industry and Trade, recently argued for higher taxes on the self-employed, saying they contribute only pennies to the budget. He compared this with the payrolls of full-time industrial workers. Critics challenge the relevance of such figures, noting that large manufacturing wages have different structures. The central issue, per policy analysts, is the distortion created by multiple tax regimes, and the resulting unfair differences in working conditions. Source: Economic Policy Review 2024.
SuperJob founder Alexey Zakharov joined the discussion, arguing that Russia hosts many freelancers who provide services not strictly demanded by the public. The real economy faces a shortage of skilled workers in engineering, education and medicine. A teacher shortage of about 500,000 is cited, with contrasts like rapid pizza delivery illustrating the tension between immediacy and long term skills. Proposals to redistribute labor resources have surfaced, but many fear the outcome could be the abolition of self-employment.
Meanwhile, surveys show broad appetite for strong measures. About 78 percent of entrepreneurs would back ending self-employment, reflecting a belief that freelance labor erodes the payroll base.
Initial reactions include reminders that serfdom ended long ago. Some employers reduce costs by steering workers into self-employment, and now they wonder why free labor is thinning and choosing partners more selectively. The labor market shows genuine imbalances. Even if fewer couriers are needed, the country still needs teachers, doctors and functioning schools. Critics note that a 4-6 percent tax on self-employment is too low to fund essential services. Simple answers do not fit the reality.
To judge whether shrinking or tightening the special regime makes sense, one must recall its origin. The regime was introduced to bring small private traders out of the shadows: mechanics, home bakers and hairdressers. They moved into daylight. If freelancing is canceled, many would return to informal work, staying in garages and kitchens, or continuing to teach via online platforms, while avoiding full state sharing. Some would register as individual entrepreneurs, but others would remain in the invisible economy.
Historical data from 2021 shows about half of the self-employed used multiple tax regimes, combining formal employment with part-time work and contributing modest sums to the budget. The common story has people working at a school during the day and teaching at night; now this pattern shifts as self-employment becomes a primary activity for many.
Employer frustration grows when people cut hours or shift to freelance work. Yet the other side shows workers seeking sick leave and holidays, protected by law, and solvable by better compensation. Bans on part-time work could leave people unable to support their families in the face of low public sector wages.
Practical steps under discussion include a modest tax uptick of 2-3 percent for those doing well, while staying in the legal field remains easier for client access and working with formal entities. Proposals urge pension contributions and sick leave coverage, with voluntary options supplemented by mandatory contributions to the Social Insurance Fund and the Compulsory Health Insurance Fund for those who earn as self-employed. Access to clinics and hospital care would hinge on contributing shares.
Restrictions are already in play this year. New criteria limit replacements of standard employment with self-employment: firms cannot cooperate for more than three months with more than 35 self-employed individuals paying above 35 thousand rubles each if this constitutes the majority of income. The aim is to balance steady staffing with freedom.
Overall, reforms are needed, yet a rushed approach would be unwise. Analysts favor moving the two regimes toward each other while preserving choice for participants. A gradual convergence could include hybrid schedules, targeted tax relief in some cases, and higher costs for long working hours in certain scenarios. The job market will still face shortages in some sectors, and a blanket ban is not the answer.
Policy discussions will continue as the economy shifts and workers reassess how they earn a living.