Central regions | Finance, business

Russia ponders new incentives for IT sector

13 Jul '20
The Russian Government last week announced a new stimuli package to develop the IT sector between now and 2024, the USRBC reported, citing the Russian business daily Kommersant.

Earlier this summer a “tax maneuver” was proposed, reducing IT firms’ social security contributions from 14% to 7.6% and income tax from 20% to 3% while re-imposing a 20% VAT on certain IT products. The new program expands that to include $564.5m in grants for R&D and start-ups; developing Public Private Partnerships (PPPs) in “digital government”; and subsidies to Russian higher education institutions to triple the total number of IT students to 150,000.

By 2024, the program envisions a doubling of IT sector employment to 750,000 workers; a doubling in domestic demand for Russian IT products to $18.3bn per year; an annual increase in IT product exports to $9.9bn; and a doubling of the IT sector’s share in GDP to 2%.

Although the program declares a “priority for domestic IT solutions,” Prime Minister Mishustin did not mention any new restrictions on imports. He said the program would focus on creating Russia-based “global IT companies” through “localizing global solutions.” The program’s text has not been published yet.
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