MOSCOW – Yaroslav Nilov, head of the State Duma Committee on Labor and Social Policy, has announced a significant proposal: granting families with a single child the right to receive a tax cashback and reducing their personal income tax (PIT) rate to six percent.
“As an alternative, I believe it`s necessary to grant families with only one child, rather than two, the right to a family tax cashback. This means lowering the personal income tax rate to 6% if they have just one child. Having one child, not two, should entitle a family to a refund of a portion of their paid PIT,” Nilov stated.
The politician revealed that deputies from various State Duma factions are actively developing this initiative. The proposal is set to be submitted to the government for review, with the aim of assessing its feasibility during the preparation of the 2026 budget draft. The ultimate goal is to ensure a greater number of families with children can benefit from a family tax cashback.
According to Nilov, a simple reduction in the PIT rate would often mean the funds remain with the employer. However, the proposed initiative ensures that while the employer would still withhold and remit the tax, the refund would be directly processed to the individual, thereby guaranteeing the money reaches the employee.
“Moving forward, it`s crucial to assess the overall performance of the new tax system parameters. Within this framework, the family cashback amount could be increased, potentially reaching up to 13% for certain categories of needy families, effectively reducing their tax rate to zero. This gradual increase in the refund mechanism is more practical and effective, and is already partially being implemented,” emphasized the head of the Duma committee.
The deputy recalled that a bill on progressive taxation, initially drafted at the direction of Vladimir Zhirinovsky, had been repeatedly considered but rejected by the State Duma in the past. This earlier proposal aimed to eliminate the tax rate for low-income earners and increase it for high-income earners.
Nilov added that “Last year, tax amendments were adopted that are now in effect. This aligns with the concept previously introduced in the State Duma. The tax rate was increased to 22% for high earners, and a different mechanism was found to reduce the rate for low earners.”
Furthermore, the deputy noted that starting next year, qualifying families with two or more children will be able to claim a “family cashback” of 7% of their paid personal income tax. “This means the effective rate for workers in such families will be 6%. This is a partial implementation of what my colleagues and I have repeatedly proposed to legislate,” he clarified.
In the parliamentarian`s view, this refund mechanism will prove to be more effective. Nilov concluded, “It is precisely through this refund mechanism that we should aim to reduce the PIT rate. It needs to be adjusted progressively, based on the number of children and by easing the criteria for those who can qualify for such a family tax cashback.”
