Discussions are underway among trade unions, employers, and the government regarding the potential exemption of low-income Russians from paying personal income tax (PIT).
This provision is part of a general agreement signed at the end of April 2024 by trade unions, employers, and the government, as reported by RBC.
In Russia, individuals are considered low-income if their monthly earnings are below the subsistence level, which currently stands at 16,840 rubles. The document states that in the coming years, Russia will pursue a more effective tax policy, aiming to address significant social and economic inequality observed at present.
The document highlights the need to amend tax legislation. Low-income Russians should be exempt from PIT, with the tax-exempt income level set at the subsistence minimum. However, trade unions advocate setting it at the minimum wage level, which currently stands at 19,240 rubles.
Russian President Vladimir Putin previously emphasized the necessity of reforms in the Russian tax system, stressing the importance of fairness. Individuals with low incomes should contribute a minimal amount to the budget, while affluent Russians may be required to pay more than they currently do.
According to Alexander Safonov, a professor at the Financial University under the Government of the Russian Federation, the income tax rate should be adjusted based on the number of dependents in a family. In Russia, working citizens not only support their children but sometimes also care for elderly parents or disabled individuals. This aspect should be taken into account in tax policy, the professor believes.