Russia Tax Incentivizes The Use Of Domestic-Built Taxis

Russian President Vladimir Putin has signed a new law promoting the local production of taxicabs used in the country. According to the legislation, Russian passenger cars would have to meet two conditions in order to be included in the taxi registry: either score a sufficient number of localization points or be produced under a special investment contract signed between March 1, 2022, and March 1, 2025.

A vehicle scores localization points for the use of Russian components and raw materials or for being assembled in the country. The required level of localization, which is currently 3,200 points, is slated to be increased to 3,700 points in 2028.

The new rules will come into force in most regions of Russia on March 1, 2026. They will not apply to vehicles entered in the cab register before that date. They will not apply temporarily to the Kaliningrad Region and the Siberian Federal District until March 1, 2028, and to the Far East until March 1, 2030.

The bill on the localization of taxicabs was introduced in the Russian parliament in 2023 and voted on by MPs earlier this month.

One of the authors of the initiative, Andrey Kutepov, who heads the Committee on Economic Policy at the Russian Federation Council, said on Wednesday that “the taxi fleet remains vulnerable in view of sanctions pressure” on Russia by the West.

The law will allow the Russian automobile industry to sell between 40,000 and 50,000 extra vehicles every year while also providing an additional ₽10 to 12 billion (US$124-150 million) in tax revenues for the state.