The Tax Restart
Russia’s Energy Ministry has elaborated a package of documents to soften taxation of oil companies. Following the summer decline in the severance tax, which will annually yield 130 billion ruble to the industry from 2009, the government is urged to sustain production and refining investments by the annual concessions of up to 400 billion ruble.
The RF Energy Ministry is completing elaboration of a new package of proposals to alter oil industry’s taxation, Deputy Energy Minister Stanislav Svetlitsky announced Friday. The proposals that will be passed to the cabinet one of these days provide for leveling export duty on petroleum, increasing the duty-free minimum in the oil price for the severance tax calculation, reducing the excise duty and raising the depreciation bonus for oil companies.
According to the Energy Ministry, the oilmen will save 400 billion ruble a year as a result, which equals the amount that spokesmen of the oil companies requested for the industry’s advance some time ago. “Under the Finance Ministry’s estimate, the tax burden on the industry is 60 percent of revenues today, and it is between 76 percent and 79 percent under the estimate of the Energy Ministry. I think it should be lowered from between 76 percent and 79 percent to 50 percent, while the released funds should go to upgrade our refineries,” Svetlitsky said.
In the oil companies, they don’t conceal their satisfaction. “They have matched our expectations in whole,” LUKOIL representatives said. Indeed, LUKOIL has been advocating similar actions since 2006. The tricky point is that the initiative of the Energy Ministry will affect budget revenues already in 2011.
www.kommersant.com
All the Article in Russian as of Sep. 08, 2008
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