The Ministry of Finance in Russia has proposed a new personal income tax (NDFL) scale that leans toward a softer approach to higher rates while signaling a clear social orientation. Viktor Machekhin, director of the Tax Policy Research Laboratory at the Presidential Academy, described the reform as a step toward a more balanced taxation system that can support broader social objectives. The plan has been framed publicly as a fairer, more transparent policy, with the emphasis on equity and social protection as guiding principles. Citizens and experts alike are watching how these changes could reshape the tax landscape and perceptions of fairness within the internal tax framework.
The core idea behind the proposed scale is to pair lower tax burdens with new deductions and a streamlined refund mechanism designed to assist low-income households. The economists involved stress that the reform aims to boost taxpayer confidence by making the tax system easier to understand and more predictable. While the specifics are nuanced, the overarching concept focuses on distributing the tax load more proportionally across households, potentially rendering the system fairer than approaches that tax individuals in isolation. In practice, this could translate to a more nuanced recognition of household economics and family circumstances in tax calculations.
Under the planned regime, the tax rate would escalate progressively based on annual income brackets. For instance, individuals earning between 2.4 million and 5 million rubles would face a 15 percent rate, while those earning 5 million to 20 million rubles would be taxed at 18 percent, and incomes ranging from 20 million to 50 million rubles would see a 20 percent rate. Those with incomes exceeding 50 million rubles would be taxed at 22 percent. The reform is projected to affect a relatively small segment of the population, estimated at around two million people, but the broader intention is to recalibrate tax fairness and revenue stability in the economy. A notable provision would reduce the effective tax burden for families with two or more children, with the rate dropping to 6 percent due to a refundable tax deduction that replaces some portion of the prior 13 percent rate with a cash-like rebate—an approach designed to support households facing higher child-related costs.
In parallel with the tax shifts, the Ministry of Finance introduced a package of legislative steps on May 28, 2024. The draft laws address the 2024 budget framework and lay out changes for the 2025 and 2026 planning periods. The intended reforms encompass not only the tax code but also related budgetary rules, signaling a broader effort to align fiscal policy with the new revenue assumptions and social goals. The government expects these measures to move through the spring session, culminating in a formal adoption process that would solidify the new framework for the coming years.
Analysts emphasize that the reforms reflect a broader trend toward linking tax policy with social outcomes. Observers highlight the potential for improved equity, greater predictability, and a more transparent relationship between earnings and tax obligations. Critics, however, caution that the success of the scale depends on administrative efficiency, the effectiveness of deductions and refunds, and the ability to prevent loopholes. Stakeholders are urged to monitor how the changes influence household budgeting, consumer spending, and long-term economic growth, recognizing that tax policy can ripple through investment decisions and savings behavior as well as day-to-day financial planning. In this context, the discourse around the 2024–2026 fiscal framework underscores an ongoing effort to balance revenue needs with social protection objectives in a dynamic, evolving economy. (Source: Newspapers.Ru)