In exchange for a reduction in VAT for all bsuiness, Alexey Kudrin offered a reduction in the mineral use tax for the oil industry.
Photo: Dmitry Dukhanin
| Other Photos |
 |
|
 |
Tax Burden on Oil Cos. Eased for 2009
Deputy Prime Minister and Finance Minister Alexey Kudrin announced yesterday that, instead of a reduction in VAT, the government will lower the mineral use tax, reducing its collection by 100 billion rubles. In addition, the Finance Ministry has decided against raising the mineral use tax for Gazprom. Sources say those decisions have already been approved by Russian president Vladimir Putin. No decision will be made on lowering the 18-percent VAT until August of this year, which means that a reduction in VAT could not come into effect earlier than 2010-2011. Minister of Economic Development and Trade Elvira Nabiullina was in favor of instituting VAT reduction next year.
The effects of tax reduction on the economy will be studied until August. Kudrin told the president on Saturday that the Finance Ministry was not yet prepared to make a conclusion on the Economics Ministry's proposal to lower the VAT next year. The president decided to delay that decision, on which, by Finance Ministry estimation, 2 percent of the GDP, or 800 billion rubles, depends, until August, by which time Putin will be prime minister, responsible for the federal budget.
The reduction of the mineral use tax, for the oil industry alone, was unexpected. Oilmen have long complained that high taxation reduces the investment attractiveness of their sector. At present, the first $9 of the price of a barrel of oil is tax exempt. The government is proposing to raise that exemption to the first $15 of the price of a barrel, a reduction of about $1.30 per barrel produced. According to the Federal Tax Service, 1.071 trillion rubles were paid by the oil industry in mineral use tax last year.
Analysts say the oil industry has been subject to growing capital and operational expenses recently due to high inflation, a stronger ruble and growing taxes. The tax burden on oil company receipts grew from 35 percent in 2002 to 60 percent in 2007, and capital expenses tripled at the same time. Experts say oil companies will be able to invest more in exploration ad new technology. The profit margin of LUKOIL is expected to rise by 0.7-0.8 percent, of Rosneft by 1.25 percent, of TNK-BP by 1 percent and of Gazprom Neft by 0.85 percent.
www.kommersant.com
All the Article in Russian as of Mar. 26, 2008
|
|
|
