The new tax limits and increased corporate tax are expected to raise around 2.6 billion rubles ($29 billion) per year.
Russia has announced plans to increase taxes on corporations and the wealthy as it scrambles for additional revenue to finance its invasion of Ukraine.
Government spending has exceeded revenues by tens of billions of dollars since Moscow ordered its troops into Ukraine in February 2022, when sanctions cut off lucrative energy sales to Europe.
The Ministry of Finance on Tuesday proposed new tax limits for high earners and an increase in corporation tax.
The changes are expected to raise around 2.6 billion rubles ($29 billion) a year, the Interfax news agency reported, citing calculations by the Ministry of Finance.
“The changes aim to build a fair and balanced tax system,” Finance Minister Anton Siluanov said in a statement, adding that the additional funds would bolster Russia’s “economic well-being.”
The proposed changes would come into force from 2025.
Russian President Vladimir Putin suggested the country would raise taxes on businesses and wealthy individuals just before he secured a fifth term in March, a further step toward the flat income tax rate that has been a cornerstone of his policy. economy during his first term. two decades in power.
Income tax is currently 13% for most Russians, with some higher earners paying a 15% rate.
The Ministry of Finance said under the changes the 15 percent rate would apply to annual incomes between 2.4 and 5 million rubles ($27,000-56,000), with three higher bands – 18 percent, 20 percent and 22 percent – higher up the income scale. The maximum rate would apply to earnings exceeding 50 million rubles ($560,000).
Siluanov said the changes would affect 2 million people and that there would be discounts for families with two or more children.
Corporate tax, meanwhile, will increase from 20% to 25%, adding 1.6 billion rubles ($18 billion) to the budget in 2025 and 11.1 billion rubles ($125.3 billion) by 2030, according to Interfax.
The ministry said corporate tax rates could increase because the percentage of profitable companies in the economy was growing.
Soldiers fighting in Ukraine would be offered exceptions to the tax regime, the Finance Ministry said.
Russia recorded a combined budget deficit of around 6.5 trillion rubles ($73 billion) in 2022 and 2023.
It has budgeted a deficit of 1.6 trillion rubles ($18 billion) this year, equivalent to about 0.9% of gross domestic product (GDP).
This story originally appeared on Aljazeera.com read the full story
