Economists predict new tax hikes in Russia “in the coming years”

In the draft federal budget for 2025, around a third of spending (6.3% of GDP) is allocated to defense needs: this is the highest figure since the Cold War, Reuters notes. The tax reform is expected to generate additional revenue of 1.7% of GDP, but this will not be enough.

“Fiscal adjustments will continue to be the focus of the government. It is possible that in 2025 we will see many initiatives to change tax laws and regulations,” Alexey Klimyuk, an expert at Alfa Capital, told the agency.

The expected fall in oil prices will also affect the economic situation: the draft budget predicts that its cost will fall from an average of $70 per barrel in 2024 to $65.5 per barrel in 2027, Reuters writes.

Alfa Bank Chief Economist Natalya Orlova, in a conversation with the agency, noted that the Russian budget still largely depends on oil prices, so “if not in 2025, then in the coming years the asks where to find additional income.”

• In July 2024, the State Duma approved a law on a progressive scale of personal income tax, changes to which will come into force in 2025. For most Russians, the base rate will remain at 13% , but for those who earn more than 200 thousand rubles a month, taxes will increase.

• Thus, with an annual income from 2.4 million rubles to 5 million rubles, you will have to pay 15% tax, from 5 million rubles to 20 million rubles – 18%, from 20 million rubles to 50 million rubles – 20%, more than 50 million rubles – 22%.

• Changes are also planned for businesses. For companies with annual income up to 50 million rubles, the income tax rate will be reduced to 10%, for medium-sized companies with annual income from 50 million to 500 million rubles, the rate will remain at 20% , and for large companies with annual revenues exceeding 500 million rubles, the percentage will increase to 25%.