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. Last Updated: 07/27/2016

Putin: Revamp Social Tax System

President Vladimir Putin has ordered a lowering of the threshold at which social security tax begins, local newspapers said Thursday.

Under the current four-step scale, companies pay a 35.6 percent tax if an employee's annual wage is up to 100,000 rubles ($3,465).

The lowest bracket is 5 percent, which companies pay for an employee whose annual salary exceeds 600,000 rubles.

The scale becomes effective if the average salary per employee exceeds 50,000 rubles. Newspapers said that Putin had ordered a cut in the threshold to 30,000 rubles, which is roughly Russia's average annual salary.

The daily Vedomosti quoted Economic Development and Trade Minister German Gref as saying the new proposal would be submitted to the State Duma next month.

He said the government hoped the Duma would approve the bill in three required readings at once so that the new system could become valid later this year.