The government has prepared new measures to support Russian IT companies

The Russian authorities are considering new measures to support the IT sector. It is assumed that now, among other things, domestic technology companies will be able to apply for tax cuts, and their employees will be able to get a preferential mortgage and a deferral from conscription.

Information that the Ministry of Finance of the Russian Federation is preparing a package of measures began to appear on the evening of February 28. One of the first to report this was the Telegram channel “Before anyone else. Well, almost.” He did not name the source, but a little later a similar material was published by RBC, which referred to a letter from the head of the ministry Maksut Shadaev to Prime Minister Mikhail Mishustin. The support measures listed by the publication were confirmed by a representative of the Ministry of Finance.

In total, the Ministry offers 10 measures:

1. “extend the mechanism of existing tax benefits also to IT companies that receive income from advertising, provision of additional services in their applications and online services or implementation, installation, testing and maintenance of partner domestic IT products”;”to exempt for the next three years all employees of IT companies from paying personal income tax, and the companies themselves from paying income tax, as well as from inspections by regulatory authorities”;
2. “to provide all employees of IT companies with a preferential mortgage with a rate of 5% for the duration of work”;
3. “to grant a deferral from conscription for employees of IT companies for the duration of their work in these companies”;
4. “to introduce a simplified procedure for obtaining a work permit and a residence permit for foreign citizens attracted to work in Russian IT companies”;
5. “to provide grants to IT companies for the development and development of IT products (by reducing the requirement for mandatory extra-budgetary co—financing of projects to 20%, and in some cases to 0%), to develop a program of preferential lending for the introduction of domestic solutions at a rate of 1% for the borrower (banks participating in the program will compensate up to 100% of the key rate Bank of Russia)”;
6. “to ensure accelerated import substitution of software at critical information infrastructure facilities through targeted budget financing through the industry competence centers being created”;
7. “to introduce preferential lending to IT companies to ensure uninterrupted day-to-day operations”;
8. “to consolidate and stimulate public procurement, including from state-owned companies, to finance new critical developments (PLM, ERP, etc.) with the possibility of its execution by large IT companies without holding tenders and auctions (auctions)”;
9. “to provide targeted funding for the creation of a GitHub open source repository in Russia.”

10. According to Vedomosti, the proposed measures “were developed taking into account the opinion of the IT industry,” and they are going to be implemented “as soon as possible.”

It is not reported where the authorities will take funds to finance the project.

According to Karen Ghazaryan, Chief analyst of the RAEC, such support from the authorities can help companies increase revenue by 10-20%. But he also notes that due to changes in the exchange rate and sanctions against Russia, the revenue of IT companies may decrease by 50%. If the company’s shares are traded on foreign exchanges, then the income may fall to 75%.