Russia's new progressive tax reform sparks regional inequality concerns
Russia is set to introduce a new progressive income tax system with five tiers, raising rates for higher earners. The reform aims to increase taxes on those making over 2.4 million rubles a year, but concerns have emerged over regional disparities. Trade unions warn that the changes could disproportionately affect areas with already high living costs, such as Kamchatka. Under the planned reform, the standard 13% tax rate will remain for lower earners and highly qualified specialists. However, individuals earning more than 200,000 rubles per month—or 2.4 million rubles annually—will face a 15% rate. The government argues this will create a fairer system, but critics highlight stark regional differences in income and living standards.
In Kamchatka, where salaries of 200,000 rubles are considered modest due to high logistics costs, trade unions oppose the reform. The Kamchatka Federation of Trade Unions has called for regional coefficients to be excluded from taxable income calculations. Meanwhile, in Krasnodar Krai, where the same wage is seen as very high, the impact of the tax hike would be less severe. Trade unions argue that applying a flat progressive scale nationwide ignores economic realities. They warn that higher earners in remote regions, already struggling with elevated living expenses, could see their purchasing power shrink further.
The proposed tax changes will apply uniformly across Russia, despite varying regional incomes. If implemented, the reform could reduce disposable income more sharply in areas like Kamchatka than in wealthier regions. Trade unions continue to push for adjustments to protect workers in high-cost, lower-wage areas.
