Helena Lyng Blak
2 weeks ago

Russia Says It Will Tax the Wealthy As War in Ukraine Continues

Russia plans to levy higher taxes on the wealthy and businesses to fund war efforts in Ukraine.
MOSCOW, RUSSIA - FEBRUARY 28, 2019: Russian President Vladimir Putin. — Photo by Free2014
MOSCOW, RUSSIA - FEBRUARY 28, 2019: Russian President Vladimir Putin. — Photo by Free2014

On Tuesday, May 29, 2024, a proposal floated by the Russian Finance Ministry suggested that Russia’s wealthy elite might face higher taxes, AP News reports. 

According to the plan, a 13% tax would be imposed on incomes up to roughly $27,000 per year in USD. Beyond that, increasing tax rates would apply up to  22% for annual incomes of approximately $555,000 or more.

The increase in income taxes would affect about 3.2% of employed Russians. 

During the Russian-Ukrainian war, unemployment has reached a historical low in Russia, leading to job security, pay raises, and social mobility–particularly among the country’s lowest earners. 

Their wages have increased at an annual rate of approximately 20%.

Meanwhile, however, Russian wealth fund reserves have been halved, and in February 2024, inflation reached a one-year high of 7.7%.

Additionally, though, the plan would also include tax hikes for businesses. Bloomberg reports that corporate profits would rise from 20% to 25%. In total, the plan would raise around $29.4 billion in 2025.

The Russian-Ukrainian conflict dates back to February 2014, when Russia occupied and annexed the Crimean Peninsula, followed by the occupation of multiple cities in the Donbas region later that year.

In February 2022, Putin and Russia announced a so-called “special military operation” and invaded Ukraine, initially attempting to seize control of Kyiv.

Last week, reports stated that Putin, according to anonymous sources, was aiming for a ceasefire in the near future. 

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