19 April 2004 23:04
Oil tax changes to bring about $2 billion extra to budget
MOSCOW. April 19 (Interfax) - A changed tax rate on crude oil and petroleum products for export and a different
method for calculating the tax on mineral extraction can bring about $2 billion extra to the federal budget if the oil
price is $27 per barrel, and about $1 billion if the oil price is $24, Deputy Minister of Finance Mikhail Motorin said
at State Duma hearings on Monday.
The deductions will amount to less than one-fourth of possible additional taxation of the oil industry, he said.
The mineral extraction tax is the best way to collect rent
payments, as it is calculated per tonne of oil produced. "This is
The Finance Ministry forecasts that the correlation between total taxes and GDP will make 29.4% in 2004.
It is necessary to make the estimate for oil production concrete and trustworthy, and that is currently not the case
with the majority of oil fields, Motorin said.
important, because the government controls the amount of oil produced thanks to the monopoly on oil
transportation," Motorin said.
It is theoretically possible to retrieve a large part of the surplus profits through changing the formula for
calculating the mineral extraction tax, but this would make domestic customers bear the expenses and domestic prices on
crude oil and petroleum products would go up, he said, adding that it would better to increase export duties.
Mineral extraction rent payments can be collected through a tax on surplus revenues, Motorin said.
The Finance Ministry was drafting a Tax Code article, "Tax on Surplus Revenues in Mineral Development," in
2002-2003. However, the law on mineral extraction does not have a clause allowing collection of this tax. Ministries and
departments have been instructed to draft the clause, present it to the State Duma in 2005 and put it into effect
starting from 2006, Motorin said. [RU EUROPE EEU EMRG ENR ECI] te aw <>
[Interfax] |
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