Russia accidentally reveals Putin 'running out of money' as he raids country's richest
Vladimir Putin last week unveiled his new financial policy which is set to deliver on the biggest overhaul of the Russian tax system in decades.
Russia may have inadvertently signalled that Vladimir Putin is "running out of money" after investing billions of rubles into the invasion of Ukraine.
The Kremlin last week approved a major amendment to its tax system to get Russia's oligarchs into paying more to the taxman.
Under the proposed amendments, the country's richest and businesses will see the current 13 percent flat rate scrapped in favour of a progressive system.
The Russian Ministry of Finance introduced 15 percent taxes on earnings over five million rubles (£43,294) in 2020 but the new system would see the rate extend to earnings between 2.4 million and 5 million rubles.
Anyone earning more than 50 million rubles (£436,863) per year would see the tax rate spike to 22 percent.
An estimate by the independent Russian news outlet The Bell suggests the lack of a plan to index the threshold would result in higher tax bills for a large section of the Russian public – even if real incomes stay stagnant.''
Speaking to Newsweek, Russian opposition politician Aleksei Miniailo said: "Current tax increases affect mostly the middle class, which is good for the regime.
"This increase in taxation is a direct consequence of the regime running out of money and they are looking for new ways to sponsor the war."
Moscow has been heavily relying on oil exports to continue funding operations in Ukraine after international investors pulled out of the country out of fear of being sanctioned.
Finance Minister Anton Siluanov insisted the new tax system would not affect large swathes of the population and said there would be exemptions for soldiers serving in Ukraine and poorer families.
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But Mr Miniailo said the pledge is part of a "careful" strategy to avoid sparking outrage against Putin's government over two years since the start of the war.
He added: "They are careful not to hit their key categories in the population, which are the poor, the bureaucracy and the very rich.
"This increase in taxation is not good news at all because it will provide more money for the war."
During the election campaign earlier this year, Putin pledged to spend as much as 40 percent of the country's total budget to continue pursuing his goals in Ukraine.
The new amendment will also see the increase of corporation tax to 25 percent and the introduction of new taxes on mineral extraction.
Current estimates suggest the new tax system would help Putin raise an additional 2.5 trillion rubles (£22.7 billion) in 2025 and 17 trillion rubles (£148bn) by 2030.
