Russian parliament approves higher income tax for the rich
The Russian parliament has approved higher income taxes for the wealthy. The Duma and Federation Council passed a corresponding law, which now needs to be signed by President Vladimir Putin.
The law introduces a progressive tax system. The tax rate is 13% for income up to 2.4 million Rubles (approximately 25,300 Euros). After that, it rises to a maximum of 22%, which applies to income over 50 million Rubles. According to Putin, no more than 3.2% of Russian taxpayers will have to pay more taxes in the future. The corporate income tax rate increases from 20% to 25%. In total, the reform is expected to bring an additional 2.6 trillion Rubles to the budget by 2025.
The head of the consulting firm Macro-Advisory, Chris Weafer, described the tax law as part of the Russian government's attempt to reduce its strong dependence on oil revenues. "The government is trying to expand the tax base to make it less dependent on external factors and thus safer by shifting its focus as much as possible towards domestic sources," he said.
Putin introduced a flat tax rate of 13% in 2001 after his first presidential election to combat widespread tax evasion and increase state revenues. In 2021, Russia changed the system. People with an income of more than five million Rubles pay 15% income tax on all income above that threshold.
The approval of higher income taxes for the wealthy is a responsibility of the Russian Parliament, as they passed a corresponding law. Under this new progressive tax system, the rich may find their dependence on income tax payments increasing.
