Authorities are tightening their control over money transfers and restricting lending to the population with semi-legal income. In response, citizens are increasingly shifting towards cash circulation. From July 2026, banks will be required to accompany all online transfers by individuals with tax identifiers for both payer and recipient. According to government plans, from next year tax authorities will begin receiving data on large and regular payments made by citizens. The tax recording of payments introduced from July 1 is being explained to the public as part of efforts to combat droppers and fraudsters.
On the first day of July 2026, Russians learned three key facts about developments in the country. First: citizens are replacing cashless payments with cash transactions. The volume of cash in circulation rose by RUB 450 bln over the past month, an increase of 18% compared with May 2026.
Second: from July 1, banks must link all non-cash payments to a unique tax identifier assigned to each citizen, which cannot be changed even if a person changes surname or passport. This system will help the tax service monitor citizens with annual incomes above RUB 2.4 mln and demand additional tax payments.
Third: from July 1, the Central Bank of the Russian Federation is making it more difficult for borrowers with unofficial income to obtain loans, including income on which taxes have not been paid.
Since the end of last year, the Russian government has been pursuing a policy of formalising the economy, while the population has responded with growing demand for cash. At the beginning of 2026, a significant structural shift was recorded: the long-term trend of declining cash usage was replaced by a sustained increase in the share of cash payments (see Nezavisimaya Gazeta, May 20, 2026).
Between February and May, the volume of cash in Russia increased by RUB 1.455 tn. On average, monthly growth up to June amounted to RUB 363.5 bln. However, in June 2026 the monthly increase in cash jumped by 24%. As a result, total cash growth from February to June exceeded RUB 1.9 tn. Monthly cash growth in Russia is accelerating. Central Bank officials attribute rising demand for cash in 2026 to cases of mobile internet shutdowns, which prompt citizens and businesses to build up reserves of physical currency. However, internet outages are not the only reason.
In March 2026, the Russian government announced plans to introduce tax monitoring of citizens’ money transfers. To enable this oversight, it became necessary to link each transfer to a specific citizen’s tax identifier.
The Russian government submitted amendments to the Tax Code to the State Duma, providing for stricter identification of bank account holders through mandatory assignment of a taxpayer identification number (TIN), as well as granting the Federal Tax Service (FTS) the right to receive information from the Central Bank on individuals showing signs of undeclared entrepreneurial activity.
‘Currently, income of individuals received via non-cash transfers from other individuals lies outside the perimeter of tax control, as it is excluded from taxation,’ government officials note in the explanatory memorandum to the bill. Once adopted, the Central Bank will be obliged to send the FTS information on bank clients who are not registered as individual entrepreneurs and whose account activity indicates business activity or systematic income from other individuals. The criteria, format and frequency of data submission will be determined jointly by the Central Bank and the FTS.
The FTS explained that the starting point for monitoring will be the threshold of RUB 2.4 mln in undeclared annual income. ‘At present, this concerns 3% of the economically active population. The measure will affect only those citizens who do not declare their income in accordance with the law,’ the tax service stated (see Nezavisimaya Gazeta, May 20, 2026).
From July 1, 2026, all banks will transmit citizens’ TIN numbers to each other when processing transfers between individuals and legal entities via the Faster Payment System (FPS). The TIN is a 12-digit number assigned once and used throughout the Russian Federation; it does not change even if a taxpayer changes residence, surname or other passport details. Operators explained the introduction of the mandatory tax identifier to news agencies as a measure to combat fraud.
The government is also planning fines of RUB 20,000 for opening an account or deposit for an individual without a TIN. At present, such fines apply only to accounts opened for organisations, individual entrepreneurs, notaries, lawyers and foreign entities. The draft law also introduces a new fine of RUB 40,000 for banks submitting inaccurate information to tax authorities regarding the opening, closure or modification of account details.
According to the FTS, the March government bill on the monitoring of money transfers is expected to generate at least RUB 49.3 bln in additional annual budget revenues starting from 2027.
An additional incentive for income formalisation is expected to come from a new Central Bank requirement on accounting for unverified borrower income. The Bank of Russia has proposed that from July 1, restrictions be introduced in calculating borrowers’ debt burden ratio (DBR), applying a reduced coefficient: only 90% of declared unofficial income would be taken into account. At the same time, a simplified approach remains in place, allowing borrowers to declare income in a bank application without providing supporting documents.
ORIGINAL:NG\Russians Rush to Switch to Cash
