The income makes it possible to replenish the army’s reserves and revive the country’s halved welfare fund. The tax reforms do not apply to well-paid army soldiers.
Russia has been waging a full-scale war of aggression in Ukraine for more than two years. Due to the increasingly expensive war, the country’s state desperately needs money to maintain its military economy.
That is why Russia has announced its biggest tax increases in many decades. German newspaper According to Der Spiegel the reforms now need the approval of the country’s parliament.
The country’s leadership has decided to increase the upper limit of income tax from the current 15 percent to 22 percent from the beginning of next year.
In order to keep the people satisfied, the state has tried to target the increases to those people who can afford them. The lower limit of income taxation remains unchanged at 13 percent, which applies to citizens living on an annual income of less than 2.4 million rubles (25,000 euros).
German website Statista according to the report, less than six percent of Russian citizens will reach a monthly income of more than 100,000 rubles (1,050 euros) in 2021. The new tax increases are expected to affect only 3 percent of Russians.
The tax reforms do not apply to well-paid soldiers serving in the Russian army.
Corporate taxation will also become tougher
In addition to income taxation, the taxation of company profits is also planned to be increased by five percent to 25 percent. With tax increases, the Kremlin aims for additional revenues of 42 billion euros annually.
The proceeds enable replenishment of the army’s reserves depleted in the war and the revival of the country’s halved welfare fund.
Minister of Economy of Russia Anton Siluanov has stated that the additional income flowing into the state coffers will be used to support families, children and youth work, as well as to develop the country’s infrastructure and the IT sector.
– This will guarantee the growth and well-being of the country’s economy, Siluanov is said to have said in a press release published by the ministry.