russian software developing industry and software exports

Chapter 4.
TAXATION SYSTEM
The share of companies unsatisfied with the
taxation system dropped from 45% до 37%.
Moreover, it was evaluated as «good» by 11%. Such
a big number of respondents happy with the taxation
systems has never been registered in our survey over
the past 5 years (in 2006 it was 4%, and in 2 recent
years – 1%).
Furthermore, the major companies comprising the
bigger proportion of the total revenue and exports
became more critical of the taxation system than a
year ago. Last year they rated it higher than smaller
companies, but this year it became the opposite.
Evaluations improved mainly owing to companies
with the turnover less than 0.5 MUSD. Obviously, the
stability and even expansion of the simplified taxation
regime for small companies against the background
of the statements made by the Government about
the inevitability of the growth of tax burden on
salaries and unsuccessful struggle of medium and
major software developers for more UST privileges
motivates small business to evaluate its status and
future higher than other companies.
Companies located outside St. Petersburg
and Moscow evaluate the taxation system slightly
better. There is no direct dependence on the share
of exports.
Due to the crisis and state budget reduction, the
Government considers the option of a tax reform
that would involve the replacement of the Unified
Social Tax (UST) with social payments, the change
of the scale and the increase in payments. These
modifications may significantly increase the tax
burden for software companies for which salaries
are the main item of expenditure (social payments
are imposed on the wages fund). According to
expert estimates, additional payment will lead to
the increase of the cost of software production by
8-15%, which would greatly weaken Russia’s positions
in the competition in the global market of software
development.
60%
50%
40%
30%
20%
45%
54%
Taxation system
37%
52%
60%
50%
40%
30%
20%
10%
0%
80%
70%
60%
50%
40%
30%
20%
10%
0%
43%
24%
Overview of Business Environment
for Software Development in Russia
Taxation system by companies' location
48%
Moscow
Poor
63%
up to 0.5 MUSD
Poor
39%
52%
9% 9%
44% 44%
12% 11%
St. Petersburg
Satisfactory
33%
Taxation system by companies' turnover
from 0.5 MUSD
to 4 MUSD
In June 2009, the Ministry of Economic
Development and Trade with the participation of the
Ministry of Information and Communications prepared
and submitted for consideration of the Government
a package of anti-recessionary measures to support
innovative business, especially Russian software
developers. This package stipulates the introduction
of a unified preferential scale of social payments
for all Russian software developers irrespective of
whether they work for export or domestic market.
The adoption of these measures would significantly
expand the existing privileges for software developers
at the moment applicable only to residents of special
economic zones and software exporters.
55%
Satisfactory
36%
BUREAUCRATIC AND
ADMINISTRATIVE BARRIERS
9%
from 4 MUSD
to 20 MUSD
54%
Others
Good
50% 50%
Good
13%
0%
over 20 MUSD
10%
0%
2008 г.
Poor
1% 11%
2009 г.
Satisfactory
Good
Bureaucratic and administrative barriers
remain one of the main problems in the industry,
the resolution of which has seen no major progress.
Nevertheless, compared to the last year the share
of «bad» evaluations concerning the way this issue is
32