Repik called the increase in income tax on all
If we raise the income tax by 1-2 p.p. for everyone – both for conditional rentiers and for investors – it will be a “disaster”, “killing the investment cycle”, the head of Business Russia believes. Profits of companies account for 60% of all investments
The income tax and investments are things that contradict each other, if now suddenly raise the income tax by 1-2 percentage points (p.p.), “it will be a disaster, just the murder of the investment cycle,” said in an interview with RBC Chairman of “Business Russia” Alexei Repik. The full version can be read in the subscription.
He explained that 60% of investments in Russia are made from the profits of companies. "When we raise income tax, it kills investment potential," Repik said.
The government has raised the income tax rate from 20 to 25 percent from January 1, 2025. As part of the budget cycle for 2027 and the planning period of 2028 and 2029, the authorities proposed a number of new tax changes, including a tax on super profits in the mining and metallurgical industry for the next three years. Big business said that instead of fiscal exemptions from certain sectors, it is preferable to temporarily raise the income tax for all by 0.5-1 percentage points.
Repik believes that if you raise the income tax, there should be a differentiated attitude towards those who invest and those who prefer to withdraw passive income. You can argue that I myself, speaking in the State Duma, proposed to raise the income tax to 30%. Yeah. You can even raise up to 35%, but provided that it can be reduced by 25 p.p. through a deduction for reinvested profits, the head of Business Russia said.
Repik proposes to introduce a deferred tax deduction that will differ from the current federal investment tax deduction. “You create a new enterprise that creates a new tax base. If it adds up, you deserve your tax deduction. You will definitely be returned, but only with new additional taxes, Repik explained.
According to the idea of "Business Russia", the company that makes investments and confirmed its expenses, will be able to issue a special investment tax certificate, which gives the right to receive a deduction from tax on future profits from the project in the amount of up to 50% of the volume of investments after the expiration of the five-year period. At the Business Russia forum on October 15, President Vladimir Putin instructed the government to work out the introduction of such a tool.
