Volodya in the Looking Glass: The President Demands Freedom for Business – Officials Report Compliance and Strangle It

At a meeting of the Prosecutor General's Office board, Putin speaks the right words: remove barriers, reduce pressure, let businesses work. The hall nods approvingly. The figures look impressive. But outside the Kremlin walls, an entrepreneur is explaining to an inspector for the third time why a shelf's angle deviates by a centimeter from a 1987 regulation.

Figures That Warm the Soul

The official statistics are striking. In 2025, the number of business inspections stood at 273,000. Since 2019, there has been a 5.6-fold reduction. A risk-based approach is applied: inspections are conducted only where there is a genuine signal of a violation. Effectiveness is reported at 88%. Preventive visits have replaced punitive raids. Drones and the "Inspector" app have taken over from folders full of protocols.

It sounds like reform. It looks like progress. But the experience is entirely different.

Because simultaneously with the reduction in inspections, VAT rose to 22%. Tax administration has tightened. Account blocking has become more frequent. The requirements for government contracts have expanded to encyclopedic proportions. There are fewer inspections, but compliance costs are higher. The form has changed; the substance has not.

A Reform with a Double Bottom

Here's a question no one in the hall dares to ask aloud: if 88% of inspections uncover violations, does this testify to the system's effectiveness, or is it a sign that inspectors simply select targets where a violation is guaranteed? A small restaurant without a lawyer is an ideal target. A large holding company with a compliance department? Not worth the hassle.

The preventive visit, which has replaced the scheduled inspection, is legally softer. But entrepreneurs across the country report the same thing: the inspector arrives for a "preventive" purpose and leaves with the same protocols, just filed under a different name. Renaming a procedure is not reform. It's cosmetic.

Corruption is Rising – The System Reacts

Putin himself cited the figure: corruption-related crimes increased by 12.3% in 2025, with an emphasis on the state defense order and national project budgets. The signal is correct. But there is a structural contradiction here that no rhetoric can resolve.

The supervisory apparatus isn't shrinking; it's being reoriented. Fewer inspections of small businesses, more control over budget flows. This seems logical, on the face of it. But the same official who yesterday checked an individual entrepreneur for compliance with fire safety standards is today overseeing a government contract. The corruption potential hasn't disappeared; it has simply migrated to where the sums are larger.

The Looking Glass in Detail

The real picture is formed by details that don't make it into official reports. The VAT increase to 22% in 2026, accompanied by "transitional measures" for small businesses – the measures exist, but understanding them without a tax consultant is impossible. Digital control via online cash registers and product labeling – formally not an inspection, but in reality, total monitoring of every transaction, paid for by the business. Arbitration statistics across the regions paint a varied picture: where formal inspections have decreased, complaints about unscheduled visits and account blocks have risen.

The president receives a report: inspections down 80% in six years. The report contains the truth. Behind the report lies a different reality.

Conclusion: Putin makes the correct diagnosis and prescribes the right treatment. The system reports compliance and continues to operate in the old way, merely changing its terminology. As long as reform is measured by the number of inspections, and not by the real freedom of an entrepreneur to open a business without years of approvals, the looking glass will remain in place. Businesses feel it. The figures in the reports do not.