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Tax Burden Reduction for Oils Not to Trim Budget Revenues
The reduction in tax burden on the oil sector won’t effect budget revenues but curtail the receipts of National Welfare Fund, Russia’s Vice Prime Minister, Finance Minister Alexei Kudrin said when commenting on the recent resolution of government presidium.
The tax guidelines for 2009 through 2011 that the government presidium approved May 26 suggest increasing the non-taxable minimal price for crude oil from $9 to $15. This price is used to calculate the ratio that reflects movement in global prices for crude oil.
Under Finance Ministry’s estimate, this move will lower the severance tax by 104.1 billion rubles in 2009 (including 98.9 billion rubles for federal budget) and by 112 billion rubles in 2010 (106.4 billion rubles).
“As the federal budget is established with all oil and gas revenues flowing to a separate account and just a portion of them going for spending afterwards, less money will flow to that separate account and accumulate in the National Welfare Fund,” the minister explained. The revenues of that fund will go down, while the budget revenues won’t be affected, Kudrin specified, adding that reduction in other taxes would result in the need to lessen government’s spending.
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