Putin says payroll tax allowance for IT firms must last to 2023

MOSCOW, Dec 1 (PRIME) -- Russian must prolong a beneficial payroll tax rate of 14% for IT companies, instead of a standard 30%, for IT companies, President Vladimir Putin said onThursday.

“We should admit that these allowances had played a significant role in support of IT companies. This measure had allowed them to apply their intellectual trailblazing potential effectively,” Putin said in an address to the Federal Assembly, the country’s two-house parliament consisting of the State Duma and the Federation Council.

Tax contributions of IT companies slightly exceeded 28 billion rubles in 2010 and reached 54 billion rubles in the two years, while a shortfall in revenue, including the allowances, amounted to 16 billion rubles, Putin said.

“In order to maintain the dynamics, I suggest prolonging these benefits until 2023. I’m sure we’ll (succeed) in turning the IT industry into one of the key export branches of Russia,” the president said.

The current allowance, expiring in 2017, stipulates a tax rate for IT companies accredited by the communications ministry. It was supposed earlier that the rate could be raised to 21% in 2018, to 28% in 2019 and 30% from January 1, 2020.

The Communications and Mass Media Ministry earlier suggested prolonging the 14% rate until the end of 2023 and ending the allowance in 2026. The Finance Ministry, concerned with budget deficit, protested against the idea.

The Economic Development Ministry said Monday it had submitted bills to the government on an indefinite prolongation of the beneficial payroll tax for IT companies.

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