STATE DUMA APPROVES FLAT INCOME TAX OF 13%
MOSCOW. June 7 (Interfax) - The Russian State Duma has approved the flat 13% income tax rate proposed by the Cabinet.
Lawmakers suggested different variants of the tax during the second reading of the income tax chapter of Part 2 of the Russian Tax Code. Duma Deputy Speaker Georgy Boos of the Fatherland-All Russia faction suggested a progressive-regressive scale with a 12% rate for yearly income less than 300,000 rubles, a 20% rate for yearly income of 300,000-600,000 rubles and a 15% rate for annual income greater than 600,000 rubles.
Chairman of the Duma Budget Committee Alexander Zhukov suggested a two-level income tax scale with a 12% rate for annual income less than 120,000 rubles and a 20% rate for a larger yearly income.
Some deputies advised leaving the rate as it is.
All the suggestions were turned down and the government's variant was accepted.
Debates on the income tax chapter are continuing at the State Duma.
The Cabinet submitted tax proposals, including the 13% income tax rate, to the parliament in late May. The Cabinet believes people with a large income do not pay the income tax because of the high rates. It has also been suggested not to tax the minimum income of 300 rubles.
A three-level income tax scale is in effect in 2000 in place of the five-level scale of 1999. The maximum income tax rate is 30%. A tax of 12% is collected from an annual income of up to 50,000 rubles, a 20% tax is collected from an income of 50,000-150,000 and a 30% tax is collected from income exceeding 150,000 rubles.