A bill was introduced to the State Duma to abolish personal income tax with an income of less than 204 thousand rubles per year. It was planned to exempt citizens who receive 17 thousand rubles a month from income tax, and a new progressive scale is introduced for everyone else, which grows depending on the size of the annual income.
The explanatory note to the document says: “The implementation of the proposed taxation system will not only increase the incomes of low and medium-income groups of the population, mitigate social inequality, but also increase tax revenues to the consolidated budget of the Russian Federation.”
The author of the initiative – State Duma deputy from the Liberal Democratic Party Sergey Katasonov – proposed leaving the rate of 13 percent for incomes up to 204 thousand rubles, for those who earn more than five million a year it will grow to 15 percent, and for incomes over 10 million – 1 , 3 million rubles plus 25 percent of the amount exceeding 10 million rubles, and for income over 100 million rubles a year – 23.8 million rubles plus 35 percent of the amount exceeding 100 million rubles.
Since 2021, in Russia, the rates of personal income tax (PIT) for wealthy citizens, whose annual income exceeds five million rubles, have increased from 13 to 15 percent. The law provides for several exceptions. For example, the rate remained the same for the sale of personal property.
In the spring of 2020, Russian President Vladimir Putin said that the share of residents who are classified as middle class exceeded 70 percent. He recalled that the middle class includes people whose income is one and a half times the minimum wage (in 2019 it was 11.28 thousand rubles).