The State Duma proposes to introduce progressive income tax
Progressive personal income tax, in case if income for one person exceeds 24 million rubles, can be introduced in the next year. This provision is contained in the draft law № 851098-6 “On Amendments to Chapter 23 of the Tax Code of the Russian Federation regarding the introduction of a progressive scale of tax on personal income” submitted to the State Duma of the Russian Federation on July 30, 2015. Corresponding amendments to the Tax Code of the Russian Federation were proposed by the deputies of “Fair Russia” faction.
According to the authors of the legislative initiative, the adoption of the amendments will encourage the direction of the companies’ profits not on the personal enrichment of business owners, but on the development of these enterprises.
The draft law is aimed at reducing social inequality, creating a harmonious social and economic situation in the country, which on the one hand, stimulates economic activity of citizens, on the other hand - improves financial solvency of the general population, which is a prerequisite for economic development.
The draft law provides for the introduction of the following personal income tax rates: up to 24 million rubles - 13%; revenues more than 24 million rubles but not exceeding 100 million rubles - 25%; revenues more than 100 million rubles but not exceeding 200 million rubles - 35%; revenues exceeding 200 million rubles - 50%.
Given the proposed threshold for the use of progressive tax rates, the draft law affects the minimum number of individuals, but it affects those who account for a large share of income of our country’s working population. For example, according to the Federal Tax Service in 2013 in Moscow revenues exceeding 24 million rubles per year were declared by about 2 800 people, 347 of them earned between 100 and 200 million rubles.
At the same time, the high income threshold provides an incentive for the development of SMEs, gives financial independence to outstanding scholars, technicians, inventors, developers of modern information technologies and software.
The deputies believe that the concept of the draft law and the rates correspond to the experience of almost all developed countries. In France revenues exceeding 1 million euro per year are taxed at 75% rate. In Germany revenues exceeding 250 thousand euro per year are taxed at 45% rate. In the UK revenues exceeding 150 thousand pound sterling per year are taxed at 45% rate. In other European countries marginal rates are also high. In Israel - 57%, in Sweden - 56.6%, in Belgium - 53.7%, Denmark - 52.2%, in the Netherlands - 52%.
Consideration of the draft law is scheduled for the autumn session.
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