Page 55 - RUSRptSept18

Another survey by RBC business portal showed that 90% of the managers of large Russian companies point to increasing presence of the state in the economy. 50% of the respondents see the state's share in the economy as "extremely high", 23% as "high", and 17% as "rather high".
Previously the Finance Ministry argued that in Central and Eastern Europe SOEs on average pay 70% dividends. It also sees uncollected dividends as representing an unjustified indirect form of state subsidy , giving state companies an unfair advantage over the private sector.
The "subsidy" for the four largest SOEs alone (Rosneft and Gazprom oil and gas giants, Sberbank and VTB bank) is estimated at RUB350bn, or 0.4% of GDP for 2016, and about RUB300bn annually in the past five years.
Russia's oil and gas sectors were a key source of tax revenues in 2017,
according to data from the Federal Tax Service (FNS).
The two extractive sectors (that also included the mining industries) provided some 29.2% of all revenue to Russia's consolidated federal budget, which includes both federal and regional budgets. That figure is up over 2016, when it reached 26.5%.
Meanwhile, increasing Mineral Extraction Tax (NDPI) returns drove some 40% of revenue growth in 2017 over 2016, or RUB2.8 trillion ($50bn).
The key dynamic at play over the last year was rising oil prices, which increased an average 25% y/y, according to Dmitri Kulikov at the domestic rating agency AKRA.
Tax revenue increases were also helped by a temporary limit on loss carryforwards, set to expire in 2020. The trend goes beyond tax revenue, with carry sectors driving industrial output as well, adds Kulikov.
“ Officials have talked a big game on structural readjustment away from hydrocarbons. Indeed, hydrocarbon revenue as a percentage of the total has fallen in recent years. But that's not due to changes in the economy so much as energy prices simply being lower: extractive sectors contributed less to the budget because they made less money,” Bear Market Brief said in a note.
55 RUSSIA Country Report September 2018 www.intellinews.com