Vladimir Putin
Moscow: Russian President Vladimir Putin on Friday signed a bill imposing higher income taxes on the rich to raise funds amid the Ukraine war. As soon as Putin’s recommendation was received, this bill took legal form. After Putin’s signature, the way has been cleared for imposing higher taxes on the rich. This law provides for a 13 percent tax on income up to 24 lakh rubles ($27,500). But the tax rate on income above that will increase. The maximum rate will be 22 percent for income above 50 million rubles ($573,000).
The bill had already been approved by Parliament
The bill was approved by the Russian Parliament just two days ago. The lower house of parliament ‘State Duma’ and the upper house ‘Federation Council’ passed this bill on Wednesday. This law envisages increasing taxes on personal income. This is a major change from the previous system of flat rate income tax. The uniform rate introduced in 2001 has played an important role in increasing revenue collection for a long time.
‘Only 3.2 percent taxpayers will be affected’
The bill also has a provision to increase the income tax rate for companies from 20 percent to 25 percent. The implementation of the new tax rates is expected to generate additional revenue of 2.6 trillion rubles ($29 billion) for the Russian government in 2025. However, Putin has previously said that the increase in income tax rate will affect only 3.2 percent of Russian taxpayers. Chris Weafer, chief executive of consultancy firm Macro-Advisory, described the tax increases as part of efforts to reduce Russia’s dependence on oil revenues. Western countries have been tightening sanctions against Russian oil exports following Russia’s military action in Ukraine. (AP)
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