Russians turn to cash, putting more strain on slowing wartime economy
Russians turn to cash, putting more strain on slowing wartime economy - Published Russians are returning to cash, as mobile internet shutdowns disrupt...
Key points
- Russians turn to cash, putting more strain on slowing wartime economy - Published Russians are returning to cash, as mobile internet shutdowns disrupt card payments, and more businesses seek to dodge tax under mounting financial pressure more than four years into the war with Ukraine.
- "Having cash on hand gives you some sense of control and security," one woman in Moscow told the BBC on condition of anonymity.
- "Most of those still trading ask customers to pay in cash whenever they can, so less money goes through the till." Taras Skvortsov, chief financial officer of Russia's largest lender Sberbank, warned last month that there were "very serious signs" that more businesses were paying wages "in envelopes" under the table.
- Cash payments help businesses understate turnover to stay below the VAT threshold, while cash wages help them avoid payroll taxes.
What happened
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Russians turn to cash, putting more strain on slowing wartime economy - Published Russians are returning to cash, as mobile internet shutdowns disrupt card payments, and more businesses seek to dodge tax under mounting financial pressure more than four years into the war with Ukraine. "Having cash on hand gives you some sense of control and security," one woman in Moscow told the BBC on condition of anonymity. "Most of those still trading ask customers to pay in cash whenever they can, so less money goes through the till." Taras Skvortsov, chief financial officer of Russia's largest lender Sberbank, warned last month that there were "very serious signs" that more businesses were paying wages "in envelopes" under the table. Cash payments help businesses understate turnover to stay below the VAT threshold, while cash wages help them avoid payroll taxes. "But another, in trying to counter so-called terrorist threats, is undermining that strategy by making it harder to collect tax," he said, referring to the mobile internet shutdowns. When mobile internet shutdowns intensified during heightened security around Russia's Victory Day celebrations in May, he said he saw people struggling...