Putin announced the rejection of the flat rate personal income tax

Russian President Vladimir Putin offered from January 1 to cancel the flat rate personal income tax. The head of state proposed to increase the tax from 13 to 15 percent for those earning more than five million rubles a year.

Putin said that the increased rate of personal income tax will only apply to incomes that exceed voiced threshold. Additional revenues from this increase will be about 60 billion rubles annually.

According to Putin, the money will be painted in the budget, to direct their will only for the treatment of children with orphan diseases.

“These funds offer a “dye”, as experts say, to protect against any other use and appropriately used to guide treatment of children with serious rare diseases, the purchase of expensive medicines, equipment and means of rehabilitation, to conduct high — tech operations,” Putin said.

According to estimates of the National rating Agency credit ratings (NKR), increasing tax rates will increase tax revenues to about 130 billion rubles a year. Only 2 million Russians are employed have an income of more than 200 thousand rubles per month, according to the rating Agency, based on Rosstat data.