On Tuesday, Russian lawmakers supported the plan to raise taxes for some mining and oil firms as part of Moscow’s effort to cover the hole left by lower energy prices and the coronavirus pandemic.
The hefty oil and mining tax rise is estimated to bring RUB340 billion (USD4.5 billion) a year.
Renaissance Capital estimated that for oil sector, in 2021 alone the planned increase would amount to RUB260 billion (USD3.4 billion) or 3.3% of the government’s tax take in 2019 from the Russian oil and gas sector.
For the mining sector, the mineral extraction tax (MET) on metals and fertilizer producers would be tripled. Russia will scrap a zero MET on high-viscosity oil and the lower rate of MET for mature oilfields. Russian metal producers would be affected by the decision.
Other than that, Russian lawmakers also voted in the first reading for lower MET for some fields in the Khanty-Mansiisk region of Western Siberia, which could cut a total of RUB3.83 billion (USD50.5 million) tax, provided the oil price exceeds the breakeven level set in the country’s budget, or USD43.3/barrel for 2021.
The plan was announced last week, in the midst of a falling Rouble, loans to support crisis-stricken Belarus and expectations of three years of budget deficit.
Oil producer Gazprom Neft commented that the government and industry should find a way to balance the needs of the budget and business.
