Tuesday, June 23, 2020

The Flat Tax In Retreat: Russia Adds A Second Top Rate Of 15% On Its Personal Income Tax.

In 2001 Russia implemented a 13% flat tax on personal income.  Russia was the first large country to adopt a flat tax,

In a speech to the nation on June 23, 2020, Russian President Vladimir Putin announced that the government would impose a second rate of 15% on persons earning more than 5 million rubles ($72,675) a year, effective January 1, 2021.  

The higher 15% rate is projected to raise an additional 60 billion rubles ($872 million), which will be used to offset some of the government's spending on the economic costs of the coronavirus.

To stimulate the growth of Information Technology companies, the new tax law would reduce the social security contributions on technology firms for its employees from 14% to 7.6% and cut the profits tax on IT firms from 20% to 3%.