Russia to Charge Firms for Using Foreign Software to Bolster Local IT

Russia plans to charge domestic firms for using foreign software to reduce dependency on non-local technology, aiming to bolster technological independence amid Western sanctions. By 2030, 80% of companies in key sectors must transition to Russian-made software, following a decree signed by President Vladimir Putin.

Russia may charge domestic companies to use foreign software, the TASS news agency quoted Digital Development Minister Maksut Shadaev as saying on Tuesday, as Moscow seeks to cut dependency on foreign technology and bolster its own. President Vladimir Putin has made achieving technological independence a key goal, as Western sanctions over the war in Ukraine seek to hamstring Moscow's ability to acquire technology and equipment from abroad that could help it on the battlefield.

As part of that push, Putin signed a decree in early May which stated that at least 80% of Russian companies in key economic sectors should transition to using Russian-made software by 2030. Many Russian companies still use foreign software in their daily operations, although an EU sanctions package passed last December prohibits companies from supplying enterprise and design-related software to Russia.

Shadaev said that introducing a levy on Russian firms would "equalise" foreign and Russian software. "...We believe that we need to create additional economic incentives for businesses to switch to Russian solutions and this should be linked to certain tax motivations," TASS cited Shadaev as saying at an IT conference.

He did not specify what the proposed fee would be, or how it would be collected. (Reporting and writing by Lucy Papachristou; Editing by Alexander Marrow and Peter Graff)