In his TV address to the nation, Russia’s President rejected the idea of implementing a progressive income tax.
The idea has been voiced as a possible instrument to generate additional revenue for sustained payment of pensions. According to the President, the option of a progressive tax was reviewed by the government but the measure was found inefficient, since without fully resolving the problems of the pensions system, it may produce devastating effects on the national economy.
As the President said, “20% tax on higher incomes can fetch about RUR 75-120 bln a year… This amount will last us six days at best”.
He also rejected such sources of the government income as selling part of state property, additional taxes on oil and gas companies, and use of national reserve funds.