The Impact of the Progressive Scale of Personal Income Tax on Social Inequality in Russia

Abstract

Starting from 2025, the progressive scale of personal income tax will be introduced in Russia. Under this taxation system, the tax rate increases alongside the growth of the taxable base, i.e., individuals’ income. For the first time, a five-tier progressive scale of personal income tax will be implemented, which will be directly linked to income levels. The progressive tax is expected to promote social justice, as a high level of wealth inequality characterises Russia. This article is devoted to the study of the impact of the progressive scale of personal income tax on social inequality in Russia. It analyses the experience of implementing progressive taxation in various countries and assesses the feasibility of its application within the Russian economy. The article explores the potential social and economic effects of transitioning from a flat to a progressive tax scale, including income redistribution, poverty reduction, and the promotion of social equity. Particular attention is given to possible barriers associated with implementing this tax reform, including administration issues, the shadow economy’s scale, and public perception. The authors conclude that an assessment of the current tax system highlights the need for reforms to introduce progressive taxation. Such reforms would contribute to a fairer distribution of the tax burden and effectively combat economic inequality in Russian society.