Russia Set to Raise Taxes on Wealthy, Big Corporations to Fund Ukraine War

By Jace Dela Cruz

May 29, 2024 09:53 AM EDT

The finance ministry of Russia on Tuesday proposed implementing new tax rates for high-income earners and specific industries starting in 2025. 

A man removes the Russian flag from the facade of Russia's House on City Hall Square in Copenhagen, Denmark, on September 26, 2023. Russia's House belongs to the Russian Embassy and has been on the EU's sanctions list since July 2022.
(Photo : IDA MARIE ODGAARD/Ritzau Scanpix/AFP via Getty Images)

Russia Wants to Implement New Tax Hikes

According to Reuters, these proposed measures include progressive income tax rates for those earning over 2.4 million roubles ($27,100) annually and an increase in the mineral extraction tax for fertilizer and iron ore producers.

The ministry expects these tax amendments to generate an additional 2.6 trillion roubles in revenue. After securing an election victory in March, Russian President Vladimir Putin also proposed increasing the taxes of companies and rich individuals for additional revenue to fund its war in Ukraine.

Most Russians currently pay a 13% income tax, with a higher rate of 15% for wealthier individuals. The proposed changes will introduce a 15% tax on annual incomes between 2.4 and 5 million roubles, 18% on 5 to 20 million roubles, 20% on 20 to 50 million roubles, and 22% on those exceeding 50 million roubles. 

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Corporate Tax Rate of Russia

According to Finance Minister Anton Siluanov, this adjustment will impact about 3.2% of the workforce, or approximately two million people.

In addition to personal income tax changes, the corporate tax rate is set to rise from 20% to 25%, with a pledge for a deduction for some investments. The ministry also plans to abolish export duties connected to the rouble-dollar exchange rate. 

READ MORE: Germany's Deutsche Bank, Commerzbank Assets Seized by Russian Court Over Gas Facility Construction Dispute 

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