31 Mar 2022 21:02

Digital Ministry asks governors to slash taxes for small business in IT sphere

MOSCOW. March 31 (Interfax) - The Digital Ministry has appealed to the heads of Russian constituent subjects with a proposal to take additional measures to support the IT industry.

This is according to a letter from Digital Minister Maksut Shadayev, published in the "Non-digital economy" Telegram channel. The ministry confirmed the document's authenticity to Interfax.

In particular, this refers to reducing the tax rate for small businesses and individual entrepreneurs who use simplified taxation system.

According to the document, the Ministry is asking regional authorities to take a number of additional measures to support the IT industry in the 2022-2024 period, "given the importance of IT for sustainable and uninterrupted functioning of public administration and sectors of the economy."

In particular, the agency recommends setting tax rates at a rate of 1% for "income" and 5% for "income minus expenses" for small and medium-sized businesses that use the simplified system of taxation. The rates are currently 6% and 15% respectively. The proposed exemption will be available to accredited companies and individual entrepreneurs who are holders of the rights registered in a single registry of software.

There are also proposals to launch regional grants for accredited companies and individual entrepreneurs.

Furthermore, the Digital Ministry is proposing at least a twofold reduction in the rate of property tax and land tax for communication facilities and data centers, as well as a reduction in the rate of rent under lease agreements for state and municipal property.

It is proposed that the measures be discussed at a meeting with Shadayev on April 6.

Earlier, the ministry suggested removing the requirement on the number of people in an organization (at least seven people) to receive benefits so that small businesses could also qualify for support measures.

On March 2, Prime Minister Mikhail Mishustin announced that as part of a new package of support measures, all IT companies will be exempt from profit tax and inspections for three years, with their employees receiving a deferment from conscription. Furthermore, mobile application developers and organizations involved in the implementation, installation and testing of domestic solutions will be given tax preferences. IT companies will also be able to secure preferential loans at a rate not exceeding 3%, and their employees will be able to get preferential mortgages.