MOSCOW — Russia’s parliament on Wednesday approved a bill that would raise income taxes for the rich, in a move to help fill government coffers during t he fighting in Ukraine.
The bill was endorsed in the final third reading by the lower house, the State Duma, and hours later by the upper house, the Federation Council. It must be signed by President Vladimir Putin to become law.
The legislation, which envisages a progressive tax on personal income, is a major change of course from the flat-rate tax that was widely credited with improving tax collections after it was introduced in 2001.
The bill would impose a 13% tax for incomes of up to 2.4 million rubles ($27,500) a year. For incomes over that amount, a steadily higher tax rate would apply, with the maximum rate of 22% for incomes exceeding 50 million rubles ($573,000).
Putin has said that the tax increase would affect no more than 3.2% of Russia’s taxpayers,
The bill also calls for an increase in the company income tax rate from 20% to 25%.
The tax reform is estimated to bring 2.6 trillion rubles ($29 billion) in additional federal revenues in 2025.
A 13% flat tax was put into effect quickly after Putin’s first election in 2000 in an attempt to fight widespread tax evasion and boost state revenue. In 2021, Russia modified the system so that people earning more than 5 million rubles a year would pay 15% on the amount above the threshold.
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