Russia simplifies non-judicial tax debt collection process

On March 25, the State Duma passed a package of bills in the first reading. These bills introduce a procedure for the out-of-court collection of tax debts from individuals. This change is similar to the existing process for legal entities and individual entrepreneurs. The new system is set to start on November 1, 2025. Under this new mechanism, tax debts can be collected more easily but only if the taxpayer does not object. If there are objections, the matter will go to court. The Ministry of Finance hopes this will streamline tax procedures and reduce the tax debts of individuals. However, some lawmakers are worried that this may infringe on citizens' rights to legal protection. Currently, debts from individuals can only be collected through the courts. The proposed out-of-court system will primarily cover property taxes and some self-reported taxes by individuals. Tax authorities will send notifications and demands for payment. If the debts are not settled, they will initiate out-of-court collection. Taxpayers have the right to object, and if they do, the dispute will be taken to a court. The time to present objections has been extended to 30 days. Officials believe this change will lower administrative costs and reduce taxpayer debts by 22.5 billion rubles. Some lawmakers raised concerns about its constitutionality, arguing that no one can lose property without a court decision. However, officials argue that the Constitution also mandates tax payments. In response to concerns about legal protections, it was noted that disputes will now be reviewed by general jurisdiction courts, rather than just administrative ones.