State Duma adopted law on progressive scale for personal income tax with rates from 13% to 22%

The press service of the country's parliament reported that State Duma deputies adopted in the third reading amendments introduced by the Russian government to the Tax Code aimed at improving the tax system.

Chairman of the State Duma Vyacheslav Volodin previously noted that all additional income that will appear in connection with the introduction of a progressive tax rate scale will go to the federal budget and will be used to support those who need it most—families with children, pensioners, and veterans.

“These are additional funds to finance new national projects and carry out the president’s instructions. Investments in infrastructure, the construction of housing and roads, the development of knowledge-intensive industries, and the high-technology sector will increase,” explained Vyacheslav Volodin.

As noted in the State Duma, most workers' income tax rates will not change. The rate of 13% will remain for income up to 2.4 million rubles per year. Income from 2.4 million to 5 million rubles per year will be taxed at a rate of 15%, from 5 million to 20 million rubles—18%, and from 20 million to 50 million rubles—20%. For income over 50 million rubles, you will have to pay 22%.

The innovations will not affect the income of SMO participants. Also, the increase in personal income tax will not affect additional payments or allowances received by those who work in the Far North, equivalent areas, or other regions with unfavorable or special climatic and environmental conditions.

“This is the decision of our President Vladimir Putin. State Duma deputies prepared and adopted a corresponding amendment,” Volodin added.

Profit tax will increase by 5%, and the VAT rate will remain unchanged. However, tax changes will not affect the self-employed or 95% of small businesses.

Author: Galina Bakhshieva