Changes in taxation: who is affected and how budgets will increase

The Russian Ministry of Finance introduced a set of proposals to change tax legislation to the government for consideration. The new rules in case of approval will be valid from 1 January 2025 and provide the budget with around 2.6 trillion rubles. Read about how this affect citizens and businesses in Realnoe Vremya’s report.

Higher income tax for companies equalised with tax deduction

First of all, it is offered to raise income tax for companies from 2025 — from today’s 20% to 25%. The Ministry of Finance explained that Russian businesses managed to significantly increase their incomes after the exit of foreign players — by 35.2% in 2025 and reached 33.3 trillion rubles. The share of profitable in the economy rose from 73.9% to 75.3%.

The rise is planned to be equalised by deductions for tax payments, which is yet available in regions. It is going to be improved and made unlimited. However, there are not any specific parameters.

Correction in simplified taxation system

It is also offered to make some corrections to the simplified taxation system.

“Step-by-step expansion of the threshold to be able to apply the simplified taxation system to develop small businesses in the future. Such an approach will allow small businesses to gradually fit in the general taxation system by expanding their enterprises. At the same it is aimed to impede business fragmentation schemes,” some materials of the Ministry of Finance read.

This will provide the federal budget with some 473 billion rubles, while regional budgets will receive 258 billion rubles. Losses of regional budgets in income taxes will total 324 billion rubles, those of wealth tax for organisations will be 58 billion rubles. This measure is to bring some 2.5 trillion rubles until 2030.

Progressive income tax rise to affect 2.5 million people and provide 3.1 trillion rubles until 2030

The introduction of a progressive rise of income tax is another change. It should be reminded that besides the main 13% tax rate, there is 15% income tax for natural persons whose incomes exceed 5 million rubles.

The changes will affect only 3.2% of the population of the country, which is around 2.5 million people out of 64 million of the working population.

Cashback for low-income families

As for low-income families, parents with two or more children can get 7% out of 13% income tax they paid. The main requirement is that the per-capita income in the family does not exceed 1.5 of the minimum wage.

“The total annual income of a family of four with two children cannot be over 1.3 million rubles. According to the minimum wage in 2025, tax deduction that can be provided to the parents with up to 53,000 rubles if both of them are employed. And it cannot be over 106,000 rubles if only one of them has a job,” the Ministry of Finance says.

So the tax deduction will be 320,000 rubles. It will look like a subsidy from the federal budget.