The Ministry of Digital Development, Telecommunications and Mass Media proposed to exempt employees of Russian IT companies from personal income tax, to provide their employees with a deferment from military service, as well as a preferential mortgage at a rate of 5% for the time they work in these companies. This was announced on February 28, citing an unnamed source Telegram channel “Before everyone” and confirmed to “Vedomosti” by a representative of the ministry.
“Measures have been prepared on behalf of the Deputy Prime Minister. They were sent by the Ministry of Digital Investigation to the Cabinet of Ministers. They will be considered by us,” a representative of Deputy Prime Minister Dmitry Chernyshenko, who oversees the industry, told Vedomosti. Earlier that day, Chernyshenko instructed the Ministry of Digital Development to prepare proposals to support Russian IT specialists in Russia and abroad, TASS reported, citing the Deputy Prime Minister’s office.
In total, the ministry proposed 10 measures to support IT companies, and this list was sent to the government, the representative of the Ministry of Digital Development specified. The measures “were developed taking into account the opinion of the IT industry,” he stressed, adding that after the government’s approval, they are expected to be implemented “as soon as possible.”
In addition to exempting employees from paying personal income tax, the Ministry of Digital Development proposed extending the tax benefits that are currently in effect for software manufacturers to companies that receive income from advertising or providing additional services in their applications, as well as “from the implementation, installation, testing and maintenance of partner domestic IT products,” the message of the Telegram channel noted.
In fact, we are talking about extending those tax benefits that were previously accepted for domestic software developers to all Russian Internet companies, Karen Kazaryan, chief analyst at RAEC, notes. According to him, the need for these measures was ripe back in 2021, when the so-called “second package” of measures to support the IT industry was adopted.
According to Kazaryan, these measures can increase companies’ revenues by 10-20%, which is a positive step for the domestic IT market. But at the same time, the potential reduction in income of IT companies against the backdrop of sanctions against Russia, as well as changes in the exchange rate, can reach 50%, he believes. And the income of those companies whose shares are traded on foreign exchanges, and 75%, the expert added.
“In my opinion, the current conditions in which domestic IT companies find themselves will lead to both an increase in the income of some companies and a decrease in the income of others,” added Leonid Delitsyn, an analyst at FG Finam.