progressive personal income tax will replenish the federal budget
In 2025, personal income tax (NDFL) revenues to the federal budget will increase sharply compared to this year’s level - by 2.6 times, from 307 billion rubles. up to 811 billion rubles, follows from the materials for the draft law on the budget for the next three-year period submitted to the State Duma. Let us explain that until now personal income tax has not been a significant part of the federal budget, since the bulk of its revenues, calculated at a base rate of 13%, are credited to regional budgets, while the center receives only collections of this tax at an additional rate of 15% on income exceeding 5 million rub. per year.
However, from 2025, all additional fees from the expansion of personal income tax progression (remember, the rate is set at 15% for income over 2.4 million rubles per year, 18% - over 5 million, 20% - over 20 million and 22% - over 50 million rubles) will go to the center. According to the Ministry of Finance’s calculations, this expansion of the personal income tax scale will bring the federal budget 336 billion rubles next year. Together with the increased tax on profits of foreign companies controlled by individuals (CFC), revenues from progression in 2025 will amount to 420 billion rubles. In 2024, collections in this category (personal income tax at an increased rate plus CFC tax) are expected to amount to RUB 94 billion. (see chart).
The Ministry of Finance in materials for the budget emphasizes that the increase in the tax burden will affect only approximately 3% of personal income tax taxpayers and that at the same time tax measures for social support will be strengthened. This, in particular, is the introduction of a tax “cashback” for families with two or more children whose income does not exceed 1.5 times the subsistence level (part of the taxes paid can be returned at the end of the year).
In addition to expanding the progressive scale of personal income tax, the increase in revenues from this tax in 2025 will be affected by the general increase in wages in the economy, expected against the backdrop of high inflation. Also, the growth of fees will be affected by the high key rate of the Central Bank, on which rates on bank deposits directly depend. According to the Ministry of Finance, the federal budget will receive 252 billion rubles from personal income tax on interest income paid by banks on citizens’ deposits in 2025. tax - after 109 billion rubles. in 2024. In addition, tax collections on dividends exceeding RUB 2.4 million. per year will increase from 87 billion rubles. in 2024 to 120 billion in 2025.
