New tax thresholds and hike in corporation tax are expected to raise about 2.6 trillion rubles ($29bn) a year.
Russia has announced plans to increase taxes on businesses and wealthy individuals to generate additional revenue for its invasion of Ukraine. The Ministry of Finance proposed new tax thresholds for high earners and an increase in corporation tax, which are expected to raise about 2.6 trillion rubles ($29 billion) annually. This move comes as government spending has far exceeded revenue since the start of the conflict in February 2022, with sanctions cutting off lucrative energy sales to Europe.
Finance Minister Anton Siluanov stated that the tax changes aim to create a fairer and more balanced system, enhancing Russia’s economic wellbeing. The amendments, set to take effect in 2025, mark a significant shift from the flat income tax rate that was a key part of President Vladimir Putin’s economic policy for his first two decades in power. Putin had hinted at these tax increases for companies and wealthy individuals just before securing his fifth term in office in March.
