The Russians turned to money, putting more pressure on the wartime economy

Dismantling the shadow economy has become a key goal for the Kremlin. Before the VAT increase took effect, Putin stressed that the new laws should not push companies into the shadows and “significantly reduce illegal employment”.

“One arm of government is trying to squeeze as much money as possible out of people through high taxes,” non-resident Alexander Kolyander of the Center for European Policy Analysis told the BBC.

Regarding the blocking of mobile internet, he said, “the other is undermining the strategy by making it difficult to collect taxes in an effort to prevent the so-called terrorist threat.”

Despite the double-digit returns on bank deposits, the Soviet-era instinct to keep money “under the mattress” remained stubbornly central and war-induced inflation remained high.

A one-year fixed term deposit of 100,000 rubles (£950; $1,280) at Sberbank, Russia’s biggest lender, currently pays 10% interest.

Despite this, central bank data showed Russians withdrew 550bn rubles from bank accounts in May, including 200bn rubles from fixed-term deposits.

Anton, a copywriter in Moscow, said a salesman at a vinyl shop offered to pay in cash. He told the BBC: “It was the first reason, high taxes.”

He said he saw people struggling to get money to spend at a flower market in central Moscow, amid heightened security around Russia’s Victory Day celebrations in May.

“A woman going from one ATM to another looking for the one that still had banknotes.”