Russian President Vladimir Putin has approved a bill that raises income taxes on the wealthy, the Associated Press reported. The move is part of efforts to fill state coffers during the war in Ukraine.
Two days ago, the bill was approved by both houses of the parliament.
The legislation, which provides for the imposition of a progressive personal income tax, is a big change from the flat rate tax that was believed to improve revenue collection after it was introduced in 2001.
The new law imposes a 13% tax on income up to 2.4 million rubles ($27,500) a year. Income above this amount will be subject to a consistently higher tax rate, with a maximum rate of 22% for income above 50 million rubles ($573,000).
According to Putin, the tax increase will affect no more than 3.2% of Russian taxpayers. The bill also provides for an increase in the corporate income tax rate from 20% to 25%.
The tax reform is expected to bring 2.6 trillion rubles ($29 billion) of additional revenue to the treasury in 2025.