(Reuters) – Russia’s Finance Ministry is proposing an increase in tax rates for individuals earning more than 2.4 million roubles ($27,100) annually, Finance Minister Anton Siluanov said in a statement isssued by his ministry’s press service.

The statement said the ministry had submitted to the government alterations to the tax system, with a tax rate of 15% to apply to incomes ranging from 2.4 million to 5 million roubles.

The changes, the ministry said, would include a rate of 18% for income between 5 and 20 million roubles, a rate of 20% for income between 20 and 50 million roubles and 22% for income exceeding 50 million roubles.

“The tax changes will affect only 3.2 % of the workforce, or 2 million people of the workforce of 64 million with annual income exceeding 2.4 million roubles,” the statement quoted Siluanov as saying.

He said the increase would apply only to the portion of the income in excess of 2.4 million roubles. Below that sum, the rate would remain at 13%.

Siluanov also said about half of families with two or more children would benefit from a rebate.

The flat tax rate of 13 % was introduced in Russia in 2001 at the beginning of President Vladimir Putin’s first term. From 2021, a rate of 15% was introduced for Russians with income exceeding 5 million roubles.

Putin gave an address in February saying there was a need to increase tax rates for those with higher incomes, and give rebates to certain families and business people investing in business development.

($1 = 88.5705 roubles)

(Reporting by Reuters; Editing by David Gregorio)

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