Putin Plans Tax Rises to Pay for the War in Ukraine

The cost the war in Ukraine and the sanctions applied because of it are hitting the Russian treasury hard , so much so that Putin now wants the people of Russia to help pay the bill as defence spending has exceeded 8% of GDP , when Putin took office he introduced a flat tax rate of 13% to be payed by everyone which was raised to 15% in 2021 but now that rate is planned to increase dependant on earnings.

A higher rate of 15% was established in 2021 for those earning more than five million roubles (around £43,500).

Now the finance ministry wants to lower the threshold for the 15% rate, so it applies to annual incomes from 2.4 (around £20,800) to five million roubles, and introduce more bands above.

Incomes between five and 20 million roubles (around £43,500 to £174,000) will be taxed at 18%, those between 20-50 million roubles (around £174,000 to £434,000) at 20%, and anything over 50 million roubles at 22%.

Under the proposals, corporation tax will also increase from 20% to 25%.
news.sky.com...

Kinda makes sense of why he's been throwing his toys out of his pram recently , the strain is starting to show.

a reply to: gortex

I will give the Russian Federation props for accumulating a sizable war chest far lager then they expected to need. I suspect they have more grind to give though.

a reply to: gortex

In Russia there is a flat tax scale. That is, any citizens, whether they earn 1 ruble or 1 billion rubles, pay a fixed small percentage of their income, unlike Western countries, where the higher the income, the higher the tax rate. This encouraged many rich and famous people in the world to obtain Russian citizenship and come under Russian tax jurisdiction.
In Russia, there has been a public debate about the fairness of a flat tax scale for decades. A long time ago. Now there are reports about a possible transition to a Western progressive tax scale. The one that has existed in the West for decades. This is absolutely independent of Russia's military actions. All such talk is stupid speculation.

a reply to: gortex
Cracks are starting to turn into Crevasses with Russian finances as Putin and his 5 day operation has turned into a 3 year war that has drained the good Russian people of their money and know he's demanding more.
I imagine Putin's paranoia is going to start to effect his daily life pretty soon as the oligarchs won't like tightening their belts.

www.telegraph.co.uk...

“Now no one in Russia can now escape the reality that their bank accounts are being raided to fund Putin’s martial madness,” he said.

a reply to: RussianTroll

So the western economic model that you so often label as corrupt, immoral and broken is far in advance of the Russian system that you constantly laud with regards to taxation?
You say that Russia's tax system has attracted many new citizens and investors....yet London is awash with Russian Oligarch's and their money?

More contradictions.

And do you honestly think that these tax hikes aren't to pay for the war in Ukraine?
Come on RT, you're a clever guy.....a bit of honesty from you wouldn't do your much damaged reputation any harm.

The sun is out, I'm going to mess about in the garden, drink a few ice cold Peroni's and maybe even enjoy a Marguerite or two.

a reply to: gortex

They will also need to replace all of the dead soldiers.
Not just bodies for their military, but working age men in their industries.

50k+ dead and 300k injured to different degrees. “Good luck finding the real numbers”

Their economy is going to be in turmoil for a long time.

a reply to: RussianTroll

This is absolutely independent of Russia's military actions. All such talk is stupid speculation

Really? Do tell us how much of your GDP is now being used to fund Putins war in Ukraine?

originally posted by: gortex

Kinda makes sense of why he's been throwing his toys out of his pram recently , the strain is starting to show.

I'm sure RT and the people of Russia are overjoyed with this as they can support Putin's efforts even more. I bet they are chanting more more more in the streets right now.

The median family income in Russia is only $7,000 and that is a drop of about 12% from last year. Add in that their inflation is about 5% per month (not per year) and you have some sorry people with little money to buy staple items with. About 75% of the country is Urban so it's those 100+ million that have almost nothing. The good news they all make too little for this tax increase to really affect them, so it is to hit the high-end incomes and now they are feeling more of the pain too.

Just to add...seems that the monthly medium income is around 40,000 rubles and for food per person is 15,000 rubles per month.

a reply to: gortex

Good! This means Nuclear War is not imminent.

a reply to: gortex

According to calculations by the Ministry of Finance, 97% of working Russians will not be affected by the increase in the scale. The increase will affect 3% of rich Russians who receive excess income. But budget revenues from taxes will increase by 1.5 times.
I checked myself, pulled up my tax returns. I will pay the same amount of taxes as before.

originally posted by: RussianTroll
a reply to: gortex

According to calculations by the Ministry of Finance, 97% of working Russians will not be affected by the increase in the scale. The increase will affect 3% of rich Russians who receive excess income. But budget revenues from taxes will increase by 1.5 times.
I checked myself, pulled up my tax returns. I will pay the same amount of taxes as before.

Really?

Under the proposed tax regime changes, Russians earning between 2.4-5 million roubles (£21,000-£43,400) will be pushed into a 15 per cent income tax rate, up from 13 per cent. The tax rate will then rise through three more tiers to a top rate of 22 per cent. Corporation tax will also jump from 20 per cent to 25 per cent.

So you're saying 97% of Russians earn less than £21,000, thats shocking???

a reply to: RussianTroll

According to calculations by the Ministry of Finance, 97% of working Russians will not be affected by the increase in the scale.

So are you're saying 97% of working Russians earn bellow £20,800 or five million roubles ?

Now the finance ministry wants to lower the threshold for the 15% rate, so it applies to annual incomes from 2.4 (around £20,800) to 5 million roubles, and introduce more bands above.

Or is that part of the report wrong ?

And of course this is due to the cost of the war , why else would Putin make an unpopular decision like raising tax on the low paid who are already having to deal with high inflation.

I checked myself, pulled up my tax returns. I will pay the same amount of taxes as before.

As I understand it the measure hasn't been implemented yet so what your current tax return says won't reflect the proposed incoming changes.

a reply to: gortex

I don’t know where you get the income figures for Russians. Recently, in a discussion on the forum, one of your British supporters wrote that I belong to the 5% of the richest Russians only on the basis that I have a 3-room apartment in the city center, a country house (dacha) and a 6-year-old Cadillac Escalade car. So, I'm just lower middle class in Russia. And tax increases don't concern me. This is the difference between GDP and GDP at PPP. In Russia, people live at a level that in Britain is considered super wealth.

a reply to: RussianTroll

Massive anonymous tower blocks in Moscow seem a little controlling and overbearing and on the poorer side if you ask me and not at all super wealthy, like you seem to think a British ATS member said? But truth be told I don't enjoy going to London as it's crazy busy and can also be overbearing because of how manic it can get.

a reply to: RussianTroll

I don’t know where you get the income figures for Russians.

It is what was quoted , it seems from a cursory search the average Russian earns £10,765 or 1,240,000 RUB so yeah I guess the average Russian won't be effected , seems being low paid has a benefit after all.

a reply to: WeMustCare

You missed it. Us Brits were nuked last Monday. Apparently.

Must have been duds though as we're all just fine.

Cost of living must provide better quality of life;more bang for your buck in Moscow 🤷🏽‍♂️🤙

a reply to: gortex

a reply to: gortex

I don't think it went his way either with his meeting with Xi.

www.express.co.uk...

Russia economy on the brink after China snubs gas pipeline deal in major blow for Putin
Putin is desperate to find new buyers for Russian gas after Europe turned off the supply following the outbreak of war in Ukraine.

China delivered a devastating blow to Russia's economic prospects after refusing to commit to a Kremlin deal over future gas exports.

The Kremlin saw its gas revenues severely hit by its decision to invade Ukraine, as European countries started to introduce bans on Russian energy exports in the aftermath of the war.