Rising costs hit Russians as Kremlin raises taxes in 2025

The Russian leader Vladimir Putin, after initiating the invasion of Ukraine and subsequently facing a series of sanctions imposed by the West, could initially be optimistic, noting the significant revenue the country gained from the rapidly rising energy resource prices, even though he had to seek out new clients.

However, the wartime boom for Russia has ended with the stabilization of prices. "Gazeta Wyborcza" notes that the growing financial challenges for Russia—whose budget relies heavily on energy resources—are evident in the Kremlin's decision to dig deeper into the wallets of its citizens and the accounts of Russian companies this year.

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

For income from 2.4 million to 5 million rubles ($21,000 - $44,600) annually, the rate increased to 15%. From 5 million to 20 million rubles ($44,600 - $178,500), it rose to 18%; from 20 million to 50 million rubles ($178,500 - $446,000), to 20%; and over 50 million rubles ($446,000), to 22%. The rate for citizens with incomes below 2.4 million rubles ($21,000) per year remains at 13%.

That's not all. From the beginning of the year, companies have been burdened with a tax rate of 25%, up from 20%.

The Russian government has decided to impose an even higher tax on the state-controlled company Transneft, which manages the oil and fuel pipeline network. Transneft will have to hand over 40% of its gross profits as a CIT tax, writes "GW."

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