In Russia, special emphasis is placed on promoting the IT industry. IT companies are given unprecedented incentives. For instance, in 2021, the new rules reduced corporate profits tax for Russian electronic hardware developers from 20 % to 3 %, and social security contribution, from 14 % to 7.6 %. In addition, the disposal of exclusive rights to use software and databases included in the Unified Register of Russian Software was exempt from the value-added tax (VAT). And although it took the preferences nearly six months to enter into force, today, the legislative process is much faster. Income tax exemption, subsidized loans, tax audit exemption and similar innovations have already become our reality.
Support of the IT industry and adopting appropriate measures has been much discussed over the past several weeks. However, it came into sharp focus and took on particular importance during the government meeting with IT experts on March 26, 2022.
The statement of Dmitry Chernyshenko, Deputy Prime Minister of Russia, sounded reassuring. “The state is doing its utmost to make raising capital possible and generate new jobs.”
The forms of support mentioned in the statement that sounded particularly clear and relatable to the IT experts, those that promote and develop the industry, were arguably the most important ones. The well-known saying “Cadres decide everything” is now more relevant than ever before. And it looks like the proposals resonated with the target audience.
Among other things, the state is ready to help IT professionals resolve the housing problem reducing the mortgage rate to 5 %. Maksut Shadaev, head of the Digital Ministry, also expressed the hope that Moscow, Saint Petersburg, and Nizhny Novgorod would be able to close 3 % at their own expense for the resulting rate not to exceed 2 %. This proposal is particularly relevant due to the fact that the preferential mortgage rate was recently increased from 7 % to 12 % per annum.
The borrower is expected to be an employee of a certified company, have specialized education, and earn more than 200,000 rubles a month in cities with a population of more than 1 million, and more than 150,000 rubles in other parts of the country.
According to the minister, nearly 50,000 people are expected to be able to take out preferential mortgages in the next three years.
“I’ve been considering a mortgage for a long time, but due to the interest rates, I could only afford getting an apartment in a building under construction. Renting an apartment and paying the mortgage for a place I could move into only in two or three years didn’t seem realistic. But now I’m pretty sure that I’ll be hosting a house-warming party very soon,” says Ivan Aronov, web developer.
It is worth mentioning another positive change. The criteria for state accreditation of IT companies have been adjusted, and the restriction on the minimum number of employees (at least seven) has been excluded.
“There are five of us, and for now, we don’t need more employees. However, at some point I was considering hiring friends just to take advantage of the benefits. I’m glad the small business is now taken seriously, because we have a lot to offer to the market,” notes Anna Efimova, owner of a web design studio. No less relevant is the deferral from military service, that was also recently announced.
According to the best traditions of the industry, the documents can be applied online, meaning that there is no need to go to the draft board.
It is also important to point out that it was proposed to expand the circle of IT companies eligible for state support. The circle will also include vendors of Russian software (even if they do not own the software), companies that receive income from the distribution of advertising and subscription services, and domestic developers of hardware and software complexes, including those that are involved in the field of cyber security.
Natalya Kasperskaya, president of the InfoWatch Group of Companies, proposed to create national information security standards. This is due to the fact that the Digital Ministry is planning on launching the first version of a marketplace for Russian software in May, and users must be completely confident in its safety and reliability.
This project will be in high demand if it provides a search function for software, comparisons with foreign analogues and customer reviews stating the pros and cons of the products.
The development of domestic software might require significant funding, therefore, in accordance with the government solution, the Digital Ministry will allocate grants. The grant amount is expected to be increased, and the procedure for receiving the funding, to be facilitated.
“I’ve been meaning to apply for a grant for a long time, but I didn’t have any experience, and the paperwork seemed a bit intimidating, because in case of any mistake, I’d be turned down. Now, there’s no such problem. It’s just a matter of presenting your product!” says Sergey Vivier, software developer. It is planned to allocate 20 bln rubles in the form of grants to replace corporate solutions.
According to Maksut Shadaev, startups will be able to receive grants of up to 500 mln rubles, and the largest companies are expected to attract up to 6 bln rubles in investments.
Another positive measure aims at revising the value of mandatory extrabudgetary co-financing from the current 50 % to 20 %, as had been the case before the pandemic. Also, 80 % of the online advertising expenses will most likely be covered, which will significantly enhance planning processes.
“Meeting the challenge of systemic stimulation of demand for finished goods would compensate for the lack of venture investments in the field and motivate employees to meet the end goals,” says Anna Mescheryakova, entrepreneur.
The claimed preferences are expected to provide work for the professionals whose jobs were somehow linked to foreign companies.
It is especially encouraging that activities aimed at training these professionals have been carried out not only at the federal, but also at the regional level. For example, the Center for Import Substitution, the Center for Managing Labor Resources, and the Regional Competence Center for the Promotion of Domestic Software were established in the Nizhny Novgorod region. The HiBrain Nizhny Novgorod platform for training and employment of IT professionals looks very promising as well.
There are only a few regions that can proudly claim to be developing their own professional ecosystems uniting young specialists, leading IT companies, training platforms, and local authorities.
In our view, it is a very decent start.
The Digital Ministry promised that soon, there would be launched a new website where all the ideas and proposals of state support for the IT sector would be collected. The Ministry stated that it would also be possible to track their implementation status.
We are confident that these support measures will be appreciated, and we will witness their positive effects using our desktops and smartphones very soon.
Director of ANO “Center for Global IT-Cooperation”
https://www.gazeta.ru/comments/2022/03/30_a_14682613.shtml?updated