Page 54 - RusRPTNov18

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.
6.1.2 Budget dynamics - govt funding plans
The Central Bank warned that there is a risk of non-compliance with the state borrowing program . Volatility in the markets carries a significant risk for the execution of the government borrowing program, the first deputy chairman of the Central Bank, Ksenia Yudaeva said on October 8. The main causes of instability in the markets, she called political and geopolitical factors. The federal budget for 2018 provides for external loans for $7bn, $4bn of, which is for the exchange of old issues of Eurobonds for new ones. In March, the Ministry of Finance placed Eurobonds for $4bn. In 2019, the Ministry of
54 RUSSIA Country Report November 2018 www.intellinews.com