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Russian Energy Ministry supports keeping existing taxation in oil sector in coming years

The Finance Ministry has come up with a proposal of changing the Mineral Extraction Tax (MET) calculation procedure

© Yegor Aleyev/TASS

MOSCOW, September 24. /TASS/. The Russian Ministry of Energy supports maintaining existing taxation conditions in the oil sector in coming years and is against the proposal of the Finance Ministry concerning the Mineral Extraction Tax (MET) calculation procedure, Energy Minister Alexander Novak said on Thursday.

"We do not address new proposals on MET calculations. The Ministry of Energy is against them," Novak said.

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"We agreed when approving the tax maneuver [change in oil export duty and mineral extraction tax rates - TASS] that the tax legislation in the oil sector will not change during the next 5 years," the minister said. "This principle should be the base one," Novak added.

Deputy Prime Minister Arkady Dvorkovich said earlier on Thursday he did not support new proposals on MET for oil in the way proposed by the Russian Finance Ministry.

TASS reported earlier the Finance Ministry’s innovation implies using the dollar’s non-forecast exchange rate for calculating price ratio for mineral extraction tax. If the Ministry projects the dollar rate within 63.5-66 rubles per dollar for the mineral extraction tax formula the rate will total 43.8-50 rubles per dollar. Similar adjustment will be made for limit values of crude export duty.

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