Russian ministry proposes to cut insurance contributions, profit tax for electronics developers, producers

MOSCOW. April 14 (Interfax) - Russia's Industry and Trade Ministry has proposed to expand tax breaks for companies in the radio electronics industry by reducing social security contributions to 7.6% and profit tax to 35, Deputy Industry and Trade Minister Vasily Shpak told Interfax.

"One of the most necessary initiatives today that is in the final stage of approval is the expansion of tax breaks to businesses in the radio electronics industry that develop or develop and manufacture electronic components and electronic products. The insurance contribution rate could be reduced from 30.2% to 7.6% and the corporate profit tax rate could be lowered from 20% to 3%," Shpak said.

He said it is proposed to focus the tax breaks on developers and manufacturers of electronic components (electronic modules). Their products are the foundation for production of electronic equipment and these businesses need to be supported to "ensure technological independence from imports," Shpak said.

An Interfax source familiar with the ministry's proposals for inclusion in the anticrisis plan said in mid-March that Russia's radio electronics industry could receive 900 billion rubles of additional financing in 2022-2024.

Shpak told Interfax earlier that as part of support for the radio electronics industry his ministry is proposing to allocate 5 billion rubles to compensate banks for discount loans extended to manufacturers.