The new tax thresholds and increased corporate tax are expected to raise around 2.6 trillion rubles ($29 billion) a year.
Russia has announced plans to raise taxes on corporations and the wealthy as it struggles to raise additional revenue to finance its invasion of Ukraine.
Government spending has exceeded revenue by tens of billions of dollars since Moscow ordered troops into Ukraine in February 2022 as sanctions cut off lucrative energy sales to Europe.
The Finance Ministry on Tuesday proposed new tax thresholds for top earners and an increase in corporate tax.
The amendments are expected to raise about 2.6 trillion rubles ($29 billion) a year, the Interfax news agency reported, citing Finance Ministry calculations.
“The changes are aimed at building a fair and balanced tax system,” Finance Minister Anton Siluanov said in a statement, adding that the additional funds would bolster Russia's “economic well-being.”
The proposed modifications would come into force from 2025.
Russian President Vladimir Putin suggested the country would raise taxes on corporations and the wealthy shortly before winning a fifth term in March, in a further step away from the flat income tax rate that was the rock cornerstone of his economic policy during his first term. two decades in power.
Income tax is currently 13 percent for most Russians, with some higher earners paying a rate of 15 percent.
The Finance Ministry said that under the amendments the 15 percent rate would apply to annual income between 2.4 and 5 million rubles ($27,000 and $56,000), with three higher bands – 18 percent, 20 percent percent and 22 percent – higher up the income scale. The maximum rate would apply to income over 50 million rubles ($560,000).
Siluanov said the changes would affect 2 million people and there would be refunds for families with two or more children.
Meanwhile, corporate tax will rise from 20 to 25 percent, adding 1.6 trillion rubles ($18 billion) to the budget in 2025 and 11.1 trillion rubles ($125.3 billion) by 2030, according to Interfax.
The ministry said corporate tax rates could rise because the proportion of profitable companies in the economy was growing.
Soldiers fighting in Ukraine will be offered exemptions from the tax regime, the Finance Ministry said.
Russia had a combined budget deficit of around 6.5 trillion rubles ($73 billion) in 2022 and 2023.
It has budgeted a deficit of 1.6 trillion rubles ($18 billion) this year, equivalent to about 0.9 percent of gross domestic product (GDP).
