Russia is preparing to raise taxes on the "rich" as war costs increase.

Specifically, the Russian Ministry of Finance will introduce a new progressive income tax for individuals instead of the current flat rate. At the same time, the country will also increase corporate income tax from the current 20% to 25%.

Taxes on mining ores and metals will also increase. These regulations are expected to take effect from 2025.

It is estimated that the total value of this tax increase program will bring an additional 2,600 billion rubles to the Russian budget in 2025. Of this, more than half will come from increasing corporate income tax.

The Russian Finance Ministry said the proposal has been submitted to the government and is likely to be approved by the country's lower house of parliament before this summer.

Russia applies a fixed personal income tax rate of 13% for most individuals. Under the progressive tax system, individuals earning between 2.4 million rubles and 5 million rubles per year will be subject to a 15% income tax.

An 18% income tax applies to those with an income of 5-20 million rubles and a 20% rate applies to income of 20-50 million rubles. If income exceeds 50 million rubles, taxpayers are subject to a 22% tax rate.

"The new progressive income tax will affect only 3.2% of the workforce, or 2 million people with annual incomes above 2.4 million rubles," Anton Siluanov, Russia's finance minister, told reporters. He added that the new rules would benefit about 50% of households with two or more children.

Russian Ministry of Finance headquarters in Moscow (Photo: Bloomberg).

Previously, Russia introduced a flat income tax of 13% in 2001, during President Vladimir Putin's first term. From 2021, the tax rate of 15% will apply to those with incomes above 5 million rubles.

According to data from the Russian Tax Service, in 2023, personal income tax revenues were 6,380 billion rubles, which is 28.6% of total tax revenues to the budget.

As for corporate income tax, the Russian Finance Ministry said the decision to raise it was due to the increase in the share of highly profitable businesses in the Russian economy . According to Siluanov, Russia's current corporate income tax rate of 20% is among the lowest among developed and emerging economies.

In an explanatory note, the Russian Finance Ministry said that the corporate income tax hike would bring in an additional 1.6 trillion rubles in 2025 and 11.1 trillion rubles in 2030. The ministry pledged to use the extra tax revenue to support businesses through investment and infrastructure spending.

In addition, the ministry also supports the proposal not to increase VAT proposed by businesses and lawmakers, because this could cause inflation to increase.

Since 2022, the Russian government has seen a large budget deficit due to the war. Specifically, in 2022 and 2023, the country had a total deficit of about 6,500 billion rubles. Russia is expected to continue to have a deficit of 1,600 billion rubles this year, equivalent to 0.9% of GDP.

Spending on the Russian Defense Ministry and the Russian security sector is increasing sharply, Kremlin spokesman Dmitry Peskov said earlier this month, according to Interfax . According to Peskov, Russia's military budget has increased from 3% to 6.7% of the country's GDP since the start of the Ukraine conflict.

Source: https://dantri.com.vn/kinh-doanh/nga-ruc-rich-tang-thue-voi-nha-giau-khi-chi-phi-cho-chien-su-tang-20240529154112055.htm