Segal Cohen & Landis Reviews Russia’s Divorce Tax

Russia is getting creative in reducing its national deficit. Currently Russia is considering increasing its divorce tax from 400 rubles ($13 US) to 30,000 rubles ($941 US). An increase of nearly 7500% would accomplish two things: raise revenue and discourage divorce.

According to Forbes this tax increase would put more than 19 billion rubles ($595 million US) back into the Russian treasury each year. Currently Russia’s deficit is set to reach $30.4 billion US in 2014 and the increase would help offset it by 4%. The increase is also meant to help stifle divorce rates. Currently Russia is experiencing a high rate of divorce. In 2012, there were 642,000 divorces and 1.2 million marriages in Russia- a 54% divorce rate. Currently the US is at a 41% divorce rate.

The announcement of the tax increase came at a particularly interesting time. Russian President Putin recently announced his own decision to divorce his wife of thirty years, Lyudmila, in June of this year. Rumors swirled that Putin was having an affair with former Olympic gymnast Alina Kabeva. However, I doubt the President will have a difficult time paying the increased tax rate.