Russia plans new electronics tax to boost domestic defence industry

Russia is introducing a new tax on imported electronics to strengthen its domestic industry and support defence production amid ongoing sanctions.

The tax, expected to take effect in September 2026, will primarily target imported consumer electronics such as smartphones and laptops, with proceeds estimated at $2.7 billion over three years. The funds will be directed toward supporting domestic electronics manufacturers, including those supplying components for drones and other advanced military equipment.

The move comes as sanctions have limited Russia’s access to Western chips and critical hardware, creating shortages that have hampered both defence projects and the country’s efforts to compete in artificial intelligence development, which relies heavily on high-performance computing.

Deputy Finance Minister Alexei Sazanov described the electronics sector as strategic, emphasizing that import substitution is vital for national defence capabilities. He noted that the government plans to gradually expand the tax to include imported components for electronic devices.

The new measure is part of a broader set of fiscal policies for 2026, which include VAT hikes and additional taxes on small businesses, aimed at balancing the state budget amid rising military expenditures and declining energy revenues.