In an interview with socialbites.ca, Nikolai Arefiev, a deputy associated with the Communist Party of the Russian Federation in the State Duma, expressed support for Belarus’s decision to raise the personal income tax on higher earners from 13% to 25%. He suggested that Russia would not emulate Lukashenko’s approach in this area, arguing that corruption and disorder were too widespread to permit a similar move.
Arefiev elaborated on a plan previously discussed within his party: to introduce a progressive tax on top earners based on income rather than wealth. He noted that high earners often transfer wealth to relatives and affiliated entities, making wealth-based taxation difficult. By contrast, income-based taxation would be simpler to enforce through the banking system. He claimed Belarus shows a higher level of order and less corruption, allowing such measures to be more manageable there. He criticized the Russian government for opposing a progressive income tax, arguing that the state would simply fail to collect such taxes if pursued. “Everything is possible with him, but nothing is possible with us,” he remarked, referencing President Putin.
Arefiev recalled that in May, deputies from the Communist Party proposed legislation to raise the personal income tax to 30% for individuals earning over 10 million rubles per year, aiming to boost state revenue.
He asserted that funds amounting to 2.3 trillion rubles could flow into the budget, though the exact figure could vary from year to year. He argued that the government could secure roughly 2 trillion rubles with careful policy, noting a precedent: two years earlier a 2% tax increase had been implemented and, subsequently, those earning more than 5 million rubles paid 15% instead of 13%. He suggested increasing the top tax rate to 20% rather than 30%, contending that the budget needs more money to fund housing and communal services, which were facing cuts and higher tariffs. He claimed the move would target wealth earned in Russia and ensure those funds were used domestically. He emphasized that the current conditions left little room for compromise and insisted that a progressive tax approach could generate needed revenue while curbing perceived inequities.
On November 29, the Belarusian parliament passed a law raising the income tax from 13% to 25% for residents with annual earnings above 200 thousand Belarusian rubles, about 5.7 million Russian rubles at the current exchange rate. Officials described the change as a mechanism to reclaim revenue collected on a large scale, with an estimate that the reform would affect roughly 8 to 9 thousand individuals. Analysts note the measure is intended to strengthen budget consolidation as the country navigates fiscal pressures.
In Russia, personal income tax thresholds have evolved. As of January 1, 2021, individuals earning over 5 million rubles annually faced a rate increase from 13% to 15%. In October 2023, the Russian Finance Ministry signaled opposition to further increases in the top rate for wealthy citizens, citing concerns about potentially reducing savings in the economy and dampening investment.
There have been discussions in the State Duma about exemptions for some Russians from certain taxes, reflecting ongoing debates about how to balance revenue needs with the burden on high earners and the broader economy. The dialogue surrounding tax policy remains a contentious and evolving issue across both nations, with officials weighing the trade-offs between revenue generation, economic growth, and social outcomes.