Russian Government To Propose Increasing The Tax-Free Earnings Threshold To ₽10,000
A bill to the Russian State Duma is due to be presented to the Government that proposes an increase from 4,000 to 10,000 rubles (US$135) the monthly income tax threshold below which individual income is not subject to tax.
The bill will be submitted by the leadership of the Committee on Labor, Social Policy and Veterans’ Affairs. They believe that the new threshold will improve the material situation of disabled people, pensioners, students, and other low-income citizens. Most political factions appear ready to support the initiative, however, may defer it due to the current pandemic.
The draft law “On Amending Article 217 of Part Two of the Tax Code of the Russian Federation” explains that at present, in accordance with paragraph 28 of Art. 17, part 2 of the Tax Code of the Russian Federation, certain types of income of citizens not exceeding 4,000 rubles are not subject to taxation.
These include material assistance of employers to their employees, reimbursement, or payment of drugs for medical use, financial assistance to an educational organization for students (cadets), graduate students, adjuncts, residents and assistant trainees, material assistance to disabled people of public organizations of disabled people, as well as the cost of gifts, received by taxpayers from organizations or individual entrepreneurs.
“It should be noted that income in the amount of 4,000 rubles not being subject to income tax was established in 2005, more than 15 years ago. Since then, inflation rose by more than 200%, because of which the specified amount of income exempt from taxation needs to be adjusted.
The bills emphasizes that the adoption of new norms will improve the material situation of disabled people, pensioners, students, and other low-income citizens who received income not subject to taxation during the year.
The State Duma is now actively amending tax legislation. For example, an exemption from personal income tax for large families or its increase from 13 to 15% for income exceeding 5 million rubles per year is also being considered. Most political factions of the State Duma consider the initiative logical.
If passed, the bill would enter into law in early 2022.
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