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The Financial Express

Putin proposes differentiated income tax rate for richer people

| Updated: June 25, 2020 10:08:19


Putin proposes differentiated income tax rate

Russian President Vladimir Putin has proposed canceling the current flat income tax rate and introducing differentiated tax for richer people with the proceeds to be channeled for the treatment of children with rare diseases.

"Now there is an opportunity to distribute the tax burden in a more differentiated manner and to channel additional financial receipts to solve specific tasks that are significant for society," Putin said in a televised address to the nation on Tuesday.

The flat tax scale will be canceled from Jan. 1, 2021, and a dynamic tax will be introduced for people with incomes of over 5 million rubles (72,664 US dollars) a year.

The rate will increase to 15 per cent from 13 per cent for the amount exceeding the 5 million rubles per year, reports Xinhua.

According to Putin, this measure will bring about 60 billion rubles (872 million US dollars).

Putin proposed to protect these funds from any other use and to specifically target them for treating children with severe rare diseases, for the purchase of expensive medicines, equipment and rehabilitation tools, as well as for high-tech operations.

The money will be added to the funds, which are already used for these purposes, Putin said.

Putin said he would instruct the government and regional authorities together with the central bank to take measures to restore the labour market completely by 2021 and to return the number of unemployed to the pre-crisis level or make it lower.

 

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