A Russian politician has suggested IT firms with operations in Russia but no data centers should pay a levy to reduce the digital divide in the country.
Russian publication Prime reports that Alexander Khinshtein, head of the information policy committee of Russia’s State Duma, the parliament’s lower house, has suggested that IT companies that do not install data centers in the country should pay 1.2 percent of annual revenue. The money would reportedly help reduce the digital divide in the country.
“I’d like to suggest the following approach – to expand this non-tax deduction of 1.2 percent for the IT companies that have failed to install the data processing centers on the territory of the Russian Federation as the law rules,” Khinshtein said at a meeting of political party United Russia with the government.
“The volume of traffic flowing to foreign companies without data processing centers, rises in Russia. These expenses are borne by our connection operators, the same Rostelecom. They do not build data processing centers, they save on expenses,” he added.
The program of bridging the digital divide, which is in progress in the country’s regions, is underfinanced, and the money it gets is not enough to meet all the needs, Khinshtein said.
In 2015, Russia introduced a data localization law, requiring “data operators” to store and process personal data of Russian citizens inside the country. In 2019, the country introduced increased monetary penalties for failure to abide by the requirements; up to $300,000 for repeated offenses.
In November 2020 Facebook paid a $50,000 fine for failure to localize its Russian user data, having previously been fined $40 under the previous rules. Earlier this year Google was fined around $41,000 for the same failures. LinkedIn was blocked in the country in 2016 because of its failure to store data locally.