Russia: Putin increased taxes on m …

The president of Russia, Vladimir Putin, signed this Monday on law to increase taxes on highest incomes announced in the middle of this year to support the economy which, as has happened in the rest of the world, has been hit hard by the coronavirus pandemic. With this new rule, the country ends the single income tax, introduced in 2001 during Putin’s first term.

From 2021, the tax rate will be reduced from 13% to 15% for income over five million rubles per year (55,350 euros or 65,900 dollars). This measure and others had been announced by the president in the middle of this year as tools to support the Russian economy in the context of the pandemic.

As the president explains, it is expected that income tax reform, one of the main sources of funding for the federal budget, will help 60 billion more rubles, the money will be used, among other things, to treat children with rare diseases.

The single income tax, introduced in 2001, was one of the key reforms of Putin’s first term. Its modification has been the subject of debate for years.

In June, Putin said the single tax “allowed wages and incomes to surface, simplify and make tax administration more understandable.”

However, he noted, with “the introduction of digital technologies” it is possible “to spread the tax burden in a more differentiated way”.

In the rest of the world, different tax initiatives are being analyzed to deal with the economic crisis caused by the pandemic. Even the International Monetary Fund (IMF) released a report prepared by the Department of Fiscal Affairs, in which it recommends increasing the highest rates of income and personal property tax, which could be achieved with a “solidarity surcharge”.