Analyst: Indefinite zero profit tax for IT to hurt Russian budget

MOSCOW, Jan 23 (PRIME) -- The proposal to cancel the profit tax for Russia’s IT companies is not wise because it will result in losses for the budget, Mobile Research Group leading analyst Eldar Murtazin told PRIME on Monday.

“It think it will be harmful, because it means loss of budget money that is certainly needed. The tax rate should be rational. Benefits cannot be endless. Today it will not kill the companies because they recovered their legs and feel fine. However, once again, we should look at the sectors, who does what,” Murtazin said.

Business daily Kommersant reported that the IT firms suggested the Digital Development Ministry make their zero profit tax, in force till 2024, endless or fix it at 3% forever. The firms fear that the rate could rise back to 20% when the benefit expires.

Murtazin said that the turnover and profit of the IT firms working in cybersecurity or applied software rose by 50% or doubled in 2022, and the zero tax looks weird in these conditions.

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