Russia's 2025: Citizens face tax hikes amid dwindling reserves

The Russian leader Vladimir Putin, after initiating the invasion of Ukraine and subsequently facing a series of sanctions imposed by the West, could initially boast about the significant revenue the country earned from the swift increase in energy resource prices. This was despite the necessity of finding new clients.

However, the wartime economic boom for Russia has concluded with the stabilisation of prices. "Gazeta Wyborcza" notes that Russia's growing financial difficulties — owing to its budget's reliance on energy resources — are indicated by the Kremlin digging deeper into the pockets of citizens and the accounts of Russian companies this year.

One of the changes in Russia's tax system is the shift from a flat tax rate. More tax brackets have been introduced.

For an income from 2.4 million to 5 million (£17,300 - £36,000) roubles annually, the rate increased to 15%, from 5 million to 20 million roubles (£36,000 - £144,000) to 18%, from 20 million to 50 million roubles to 20% (£144,000 - £360,000), and over 50 million roubles (£360,000) to 22%. The rate for citizens with incomes below 2.4 million roubles (£17,300) per year remained at 13%.

This is not all. From the beginning of the year, companies faced a higher tax rate of 25% instead of 20%.

"An even higher tax was decided upon by the Russian government to be collected from the state-controlled company Transneft, which manages the network of oil and fuel pipelines. Transneft will have to hand over 40% of its gross profits as a Corporation Tax," writes "GW."

"IT companies, which have been exempt from Corporation Tax in Russia for the last three years, will now pay this tax at a reduced rate of 5%," the newspaper adds.