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Signs of Russia’s so-called special military operation are everywhere in Moscow, from roadside recruitment adverts to Z-themed souvenirs.

Now there is another example – a proposed tax hike, that amounts to the biggest shake-up of the Russian tax system in a quarter of a century.

As the war in Ukraine continues to drain the Kremlin’s coffers, the government is scrambling to find new ways to finance it.

Read more: Ukraine-Russia war latest updates

Pro-Russian 'Z' patches on display at a store in Moscow
View of a store in Moscow selling pro-Russia and pro-war merchandise

Its answer is a new progressive income tax rate that will target the wealthy, as well as a rise in corporation tax.

The proposals were first mooted by Russian president Vladimir Putin on the campaign trail ahead of his re-election in March. Analysts say he was forced to act.

Defence spending has surpassed 8% of GDP, and is sucking up nearly a third of the state budget this year.

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“It seems like the tax reform is a tool to move the economy from butter toward guns,” said Alexander Kolyandr, a non-resident senior fellow at the Centre for European Policy Analysis.

“The government is no longer concerned about you eating well, but rather about you producing more guns.”

The reforms mark a dramatic departure from the Russian leader’s previous tax policies.

Pic: AP
Image:
Pic: AP

In 2001, shortly after assuming office, he introduced a flat rate of just 13% that was applied universally, and most Russians have been paying the same rate ever since.

The move simplified a previously complicated tax regime which few adhered to and it successfully boosted revenues – and his popularity – as a result.

A higher rate of 15% was established in 2021 for those earning more than five million roubles (around £43,500).

Now the finance ministry wants to lower the threshold for the 15% rate, so it applies to annual incomes from 2.4 (around £20,800) to five million roubles, and introduce more bands above.

Incomes between five and 20 million roubles (around £43,500 to £174,000) will be taxed at 18%, those between 20-50 million roubles (around £174,000 to £434,000) at 20%, and anything over 50 million roubles at 22%.

The proposals will also see corporation tax increase from 20% to 25%.

Pro-Russian artwork in Moscow, featuring the 'Z' icon used throughout the war in Ukraine

If adopted by the Russian parliament, the changes will come into force next year and generate 2.6 trillion roubles (£22.5bn) in budget revenues, the government said.

“For the past two years, the Russian economy has been running on state spending,” Mr Kolyandr said.

“It cannot last forever, because in effect, it’s mortgaging your future.

“To get this mortgage more appealing, you need more money.”

Read more:
Putin ready to ‘freeze the war’: sources
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According to the Kremlin, 3% of the workforce will be affected by the changes, which it insists are fair.

It says the reforms should solve national problems, reduce inequality and help develop Russia’s regions.

But the official line has been met with some scepticism on the streets of Moscow.

A woman takes photos of art about Russia's war in Ukraine in Moscow

“I think they don’t have enough money for the special military operation, that’s why they’re introducing it,” Sergei told Sky News in Moscow.

Ulyana agreed, adding: “I don’t think it’s fair to tax more from 200,000 [roubles a month].

“This will just affect people who work a lot.”

In reality, everyone here is affected by Russia’s current path. This is merely the latest impact, and it will be felt in people’s pockets.

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‘My family is finished’: Afghan man in UK military data breach says he feels betrayed

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'My family is finished': Afghan man in UK military data breach says he feels betrayed

An Afghan man who worked for the British military has told Sky News he feels betrayed and has “completely lost (his) mind” after his identity was part of a massive data breach.

He told The World with Yalda Hakim about the moment he discovered he was among thousands of Afghans whose personal details were revealed, putting him at risk of reprisals from the Taliban.

The man, who spoke anonymously to Sky News from Afghanistan, says he worked with British forces for more than 10 years.

But now, he regrets working alongside those troops, who were first deployed to Afghanistan in 2001.

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Afghans being relocated after data breach

“I have done everything for the British forces … I regret that – why (did) I put my family in danger because of that? Is this is justice?

“We work for them, for [the] British, we help them. So now we are left behind, right now. And from today, I don’t know about my future.”

He described receiving an email warning him that his details had been revealed.

He said: “When I saw this one story… I completely lost my mind. I just thought… about my future… my family’s.

“I’ve got two kids. All my family are… in danger. Right now… I’m just completely lost.”

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The mistake by the Ministry of Defence in early 2022 ranks among the worst security breaches in modern British history because of the cost and risk posed to the lives of thousands of Afghans.

On Tuesday, a court order – preventing the media reporting details of a secret relocation programme – was lifted.

Read more from Sky News:
Minister defends handling of breach
The struggle for equality in Afghanistan
Afghan women throw babies to troops

British soldiers wait to be transported to a base in the provincial capital Lashkar Gar in Camp Bastion, Helmand, February 5, 2010. REUTERS/Baris Atayman (AFGHANISTAN - Tags: MILITARY POLITICS CONFLICT)
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Reuters file pic

Defence Secretary John Healey said about 6,900 Afghans and their family members have been relocated or were on their way to the UK under the previously secret scheme.

He said no one else from Afghanistan would be offered asylum, after a government review found little evidence of intent from the Taliban to seek retribution.

But the anonymous Afghan man who spoke to Sky News disputed this. He claimed the Taliban, who returned to power in 2021, were actively seeking people who worked with British forces.

“My family is finished,” he said. “I request… kindly request from the British government… the King… please evacuate us.

“Maybe tomorrow we will not be anymore. Please, please help us.”

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Why Trump changed his mind on Ukraine

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Why Trump changed his mind on Ukraine

👉Listen to The World with Richard Engel and Yalda Hakim on your podcast app👈

This week, Yalda and Richard discuss Donald Trump’s big decision to send weapons to Ukraine through NATO. Why has he changed his mind?

Yalda gives her take on the situation and why she thinks Trump is following a similar position to presidents before him when it comes to Russian leader Vladimir Putin.

The two also discuss the UK’s secret Afghan immigration scheme after a massive data leak and gagged media. But how serious is this for those people still stuck in Afghanistan trying to flee the Taliban?

To get in touch or to share questions, email theworld@sky.uk

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Ross Edgley: The British ‘Thor’ swimming 1,000 miles around Iceland – and what happened when he met killer whales

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Ross Edgley: The British 'Thor' swimming 1,000 miles around Iceland - and what happened when he met killer whales

Towering waves, freezing temperatures and even some inquisitive killer whales. Iceland is doing its best to defeat Ross Edgley. 

Inspired by “Thor”, the British extreme athlete is in the middle of a challenge worthy of the Norse god – spending four months swimming 1,000 miles around the whole of Iceland in the name of science.

And while it comes with its challenges – a video of parts of his tongue falling off because of the salty sea water went viral – there have also been moments of beauty in the rugged Viking landscape.

“We’re on the northern coast right now,” Ross tells Sky News as he prepares to get back in the water.

“There’s nothing to stop the wind coming from the Arctic, and it’s just smashing into the north of Iceland. We’re miles out, just like a bobbing cork getting absolutely battered.”

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Ross is making his way around Iceland clockwise after setting off from Reykjavik

Ross, from Cheshire, is no stranger to endurance events like this. In 2018, he swam nearly 1,800 miles around the coast of Great Britain and earned a Guinness World Record for swimming 317 miles along the Yukon River in Canada.

But the punishing cold as 39-year-old Ross swims 30km (18 miles) a day around Iceland is something else.

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“The body just takes a consistent battering,” he says, characteristically cheery and enthusiastic despite everything.

“You just do your best to keep it in some sort of shape, controlling the inevitable breakdown of your body, hoping that you get back into Reykjavik.”

Ross Edgley Iceland swim
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Some of the injuries Ross has picked up so far, and the salt water hinders healing

He’s eating between 10,000 and 15,000 calories a day – with pasta and his new favourite Icelandic liquorice as menu staples – just to keep going.

“You’re basically running through all of that food – I’m constantly saying it’s basically just an eating competition with a bit of swimming thrown in,” he chuckles. “But that’s genuinely what it is.”

His average day – storms permitting – sees Ross getting up and swimming for six hours, resting for six hours, and then getting back in the water to swim another six hours.

“You just do that on repeat. It’s really simple in theory, but brutal in reality.”

Ross Edgley Iceland swim
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Ross is covering about 18 miles (30km) a day

To get ready for the cool Icelandic waters, Ross took inspiration from animals that have made it their home for thousands of years: whales and seals.

“I ended up putting on about 10-15 kilos of just pure fat. A bit of muscle as well but a lot of fat.

“When you look at what sort of animals survive in Iceland, there’s that idea of sea blubber. You want insulation, you want body fat.”

Perhaps unlike a seal however, Ross takes great care to defend the reputation of the killer whales that hunt in Icelandic seas.

“We’ve seen a lot, pods of them have come by and checked me out, wondering what the strange Englishman was doing in Icelandic waters, and then we went our separate ways.

“I want to combat some of the bad PR that orcas might have because there’s never been a verified case of an orca attacking a human in the wild. It just doesn’t exist.

“They’re amazing animals that deserve our respect and shouldn’t be feared.”

Ross Edgley Iceland swim
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Ross back on board his support boat after swimming

There’s also a big scientific focus for Ross’s challenge as well.

“If we achieve this, it will achieve so much in terms of sports science – the first person to swim around Iceland. But that wasn’t a big enough reason to do it.”

Ross spoke to scientists who said that if he was “crazy enough” to want to do the swim, he would be able to collect daily samples of environmental DNA in the water, as well as levels of microplastics.

“By the end we’re just going to have this map of biodiversity around the whole coast of Iceland in a level of detail we’ve never really seen before. It’s going to be so comprehensive.

“So I think as the legacy of this swim, records and everything will be nice, but I actually think the science and the research that we contribute and give back will be unbelievable and actually make the chafing and losing parts of my tongue worth it.”

The swim is being paid for by a mix of sponsorships and self-funding.

Ross Edgley Iceland swim. Pic: James Appleton/BMW
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Ross Edgley is swimming 1,000 miles around Iceland. Pic: James Appleton/BMW

Ross says he was inspired to take on the challenge in part by actor Chris Hemsworth and his role as the Norse god Thor, joking that the feat would be the closest thing to swimming around Asgard, the realm of the deities from ancient Scandinavia.

As he makes his way around the island, he gets to meet a local community where stories of Nordic gods are still an important part of life.

“It’s amazing, we’re just hearing these stories of Nordic folklore, sagas written about every single fjord we go around. It’s unbelievable.”

Ross Edgley Iceland swim
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Ross and his team rest on land between swims

Fresh off one marathon swimming session, Ross and his team jumped into action to help the local community rescue 30 stranded whales.

“The team were absolutely exhausted… but having rescued the whales was the most rewarding moment as well.”

Ross Edgley Iceland swim
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A moment of downtime on the boat. Pic: Ross Edgley/YouTube

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Ross set off on his swimming quest on 17 May, and it’s likely going to be a couple more months before he arrives back in Reykjavik.

He suggested that September is the goal, but added: “But you make plans and Iceland laughs at them.”

Picture credits: Ross Edgley/YouTube

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