Page 16 - FSUOGM Week 36

FSUOGM POLICY FSUOGM

Russian lawmaker calls for hike

in oil export duties

RUSSIA A lawmaker in Russia’s State Duma has proposed (MinFin) is preparing to submit amendments to
raising the oil export duty and abolishing VAT a trial profit-based tax system to the government,
The move would run refunds that oil exporters receive – moves that Kommersant reported on September 3.
counter to the planned would run counter to the current direction of The excess profit tax (EPT) scheme was
direction of Russian tax Russian oil tax reform. launched last year at various categories of
reform over the next The proposals were made by Deputy Valery upstream projects, as part of efforts to reform
few years. Gartung, who also serves as first deputy chair- the oil industry’s complex and contradictory
man of the Duma’s committee on economic tax regime. Its goal is to encourage investment
policy, industry, innovative development and in more challenging projects, and its propos-
entrepreneurship. The aim is to lower the cost ers want to introduce the system nationwide
of oil supplies for domestic refineries and boost within a decade, replacing MET that levies
their margins, by deterring producers from taxes based on production volumes rather than
exporting. profitability.
Under the so-called tax manoeuvre that The MinFin has dismissed the scheme as
began last year, however, Russia is steadily low- a mistake, however, estimating that it has cost
ering the export duty on oil and intends to bring the budget more than RUB200bn ($2.65bn) in
it to zero by 2025. Over the same period, mineral lost receipts. The ministry will submit a bill on
extraction tax (MET) is due to rise steadily. A adjusting the system in the coming days, accord-
reverse excise duty on domestic oil supplies has ing to Kommersant. Its hope is that the Duma
also been introduced, to offset higher costs for will adopt the draft law this autumn.
domestic refiners. NewsBase first reported that the ministry
Given the current path of reforms, VTB Cap- was seeking changes to the EPT regime in early
ital (VTBC) said it did not expect the latest pro- August. Among its key proposals is a cut in
posals to be supported or passed by Parliament, the historical project losses that operators can
in its note on September 2. deduct from their tax base. Russian producers
In other news, Russia’s Finance Ministry have opposed the changes. ™

P16 www. NEWSBASE .com Week 36 09•September•2020