Raising taxes on passive income could bring Russia’s budget an additional 700 billion rubles a year, economist says
Applying Russia’s progressive personal income tax to income from deposits, dividends, investments, and property sales could bring the budget roughly 500–700 billion rubles in additional revenue a year, economist Dmitry Polevoy estimated.
Dmitry Polevoy, an economist, believes implementing a progressive personal income tax on passive income streams like deposits, dividends, investments, and property sales could generate an additional 500 to 700 billion rubles annually for Russia's budget. Currently, Russians pay a 13-15% tax on passive income. Polevoy's proposed changes would introduce a progressive tax rate of 13% to 22%, affecting only about 6% of Russians, or roughly four million individuals.
Notably, war veterans and those earning up to one million rubles in deposit income would be exempt from these new tax rules. While a standard personal income tax hike typically reduces demand and inflation, Polevoy suggests that raising taxes on investment and interest income might have a less effective disinflationary effect or even exhibit proinflationary tendencies.
High earners are likely to reinvest a significant portion of their earnings from deposits and investments, meaning the new tax could redirect some of their funds from savings into consumption, supporting social payments and other budget expenditures. To meet its financial obligations, the Russian government plans to allocate 48.8 trillion rubles in spending for 2027, a 5.7% increase compared to 2026.
Currently, budget revenues are projected at 43.3 trillion rubles, with a deficit of around 5.5 trillion rubles, or 2% of GDP.
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