Page 45 - RusRPTJune18

as of 2015 when the oil price collapsed, which has been exacerbated by tax manoeuvring, as a lower export duty rate led to higher feedstock prices for refiners, and hence undermined their margins.
Russian government "is on the brink" of increasing retirement age in Russia from their extremely low Soviet-era levels, Prime Minister Dmitri Medvedev told Rossiya 1 TV channel on April 28, announcing the start of one of the most overdue post-Soviet reforms. One the few advantages of living in the “workers paradise” was retirement ages were very low. Obviously a politically sensitive topic, the government has been loathed to increase them to international levels. But covering pension fund deficit has made the decision a necessity. The government is proposing to increase retirement age from current 55 for women and 60 for men in a move that has been repeatedly flagged by the international and domestic analysts as a structural necessity, but has for years remained a taboo seen by Kremlin as toxic and unpopular reform.
VEB published a macro projection for 2018-2021 with a base case featuring a pension age increase by half a year per year starting in 2020 . The very next day, the projection was deleted from VEB's website. The Minister of Economy announced at the "Russia: New Opportunities" Forum that such an increase is indeed being discussed, with several proposals on the topic already formulated. When prodded by journalists on where such discussions are occurring, he replied "in society." Both stories mark continued paralysis on pension reform, despite an increasingly evident need to do something: the number of workers per pensioner continues to shrink, as do pension benefits in real terms.
Russia's Finance Ministry warned that it would have a RUB204bn ($3.3bn) hole in budget revenues in it if state-owned enterprises (SOE) don’t pay out the 50% of profits they have been ordered to by the government ,InterfaxandV edomosti dailysaidonApril23citingunnamed sources in the government.
MinFin’s complaints is the latest in a running battle between the liberal fraction running Russia’s finances and the heads of Russia’s largest companies, most of whom run their enterprises like personal fiefdoms. MinFin continues to demand that state-owned enterprises pay the requested 50% of IFRS net profit in dividends, warning the Prime Minister Dmitri Medvedev that 2018 budget will have a big hole in it if they don't.
The 2018 federal budget plans to raise RUB380bn in dividends based on 50% of IFRS net profit, most of the state majors dodge. Gazprom natural gas giant alone will save paying the state RUB78bn by paying 25% of consolidated net profit.
Rosneftegaz holding controlled by influential ally of President Vladimir Putin Igor Sechin is another long-time rival of the Ministry of Finance in the fight for dividends , and still holds half of the RUB40.6bn interim dividends for January-June 2017 from Russia's largest oil company Rosneft. Rosneftegaz does nothing other than hold shares and has less than a dozen employees. Sechin is head of both the oil company and the holding.
Also Russian oil pipeline monopoly Transneft dodged the full dividend payout for 201 7. t is unlikely that given the favourable oil prices environment the
45 RUSSIA Country Report June 2018 www.intellinews.com