In russia, the IT industry is rapidly losing the benefits that were introduced in 2022 when Western companies began to leave russia’s market. The government is now abolishing some of the incentives, increasing insurance contributions from 7.6 % to 15 % and reinstating VAT on registered software. This decision, which will come into force in 2026, has provoked a sharply negative reaction from businesses and investors.

The MOEXIT sector index has fallen by more than 17 % over the year, becoming one of the worst among all sectors of the russia’s economy. Investors no longer believe in “localization” and import substitution, which the authorities actively used as a cover after the Western companies’ mass exodus in 2022.

Entrepreneurs predict that the abolition of tax breaks will lead to higher prices for IT products, staff cuts, and a two- to threefold decline in company profits. Small and medium-sized IT companies will be hit hardest, as they will find it difficult to survive amid growing tax pressure and tight monetary policy.

russia’s IT industry, which until recently was called the “locomotive of technological sovereignty”, is now rapidly losing ground. Even large companies admit that “the negative impact is evenly spread across all businesses”. The current reality for the russian IT sector is a decline in investment, curtailment of projects, and specialists’ leaving for abroad.