20 JUNE 2024

The Russian State Duma has approved in the first reading a package of amendments that introduces the largest tax increase in Russian history.

Source: The Moscow Times

Details: It is noted that the draft introduces a five-stage progressive personal income tax scale. It is expected to be adopted in the summer, and the changes will come into force on 1 January 2025.

Quote: “As a result of the reform, over the next six years, 16.8 trillion roubles (US$192.3 billion) will be taken from the population and businesses, an amount that is one-third higher than the total size of the National Welfare Fund (12.75 trillion roubles or US$145.9 billion) and more than three times its liquid but unspent part (5.2 trillion roubles or US$59.5 billion).

As part of the amendments to the Tax Code, a progressive personal income tax scale will be introduced in Russia next year, which will affect citizens earning more than 200,000 roubles (US$2,289) per month,” the statement said.

It is reported that more than 11 trillion roubles (US$125.9 billion) will be paid to the treasury by businesses over the next six years. Starting in 2025, Russia will increase the corporate tax rate from 20% to 25%.

Background:

• In March 2024, it was reported that the Russian government planned to increase taxes for the population and businesses after the presidential elections, which would allow an additional budget revenue of over US$27 billion to increase spending on the war.
• In May, it became known that Russia was preparing to raise the VAT rate for enterprises from 20% to 25%, as well as for individuals whose annual income exceeded US$27,000.
• Russian Kremlin leader Vladimir Putin has instructed Russian officials to approve a progressive personal income tax scale by the end of August.

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https://www.pravda.com.ua/eng/news/2024/06/20/7461769