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Russia has no plans to raise tax burden on oil industry — Deputy PM

Earlier, sources told TASS that the Finance Ministry and the Energy Ministry were unlikely to agree on a new system of taxation of the oil industry in 2016

© Egor Aleev/TASS

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MOSCOW, May 18. /TASS/. The Russian government has no plans to increase tax burden on the oil industry, Deputy Prime Minister Arkady Dvorkovich told journalists on Wednesday.

"No, we have no plans," Dvorkovich said, answering a question about the possibility of strengthening tax burden on "the oil industry".

Earlier, sources told TASS that the Finance Ministry and the Energy Ministry were unlikely to agree on a new system of taxation of the oil industry in 2016. Thus, the transition to additional income tax will not happen in 2017. The Government is not content with the existing tax regime, which consists of various taxes and does not account for the complexity of the field development, as well as their profitability. The current tax system reduces companies’ interest in developing new deposits. However, so far in two years the Finance Ministry and the Energy Ministry could not agree on the parameters of the tax system for oil companies.

The Energy Ministry and oil companies propose to start a large-scale tax reform in the oil sector this year, based on the taxation of net income. The main objective of the reform is to prevent decline of production in traditional regions and to transition to revenues from taxes, based on profits from oil production activities - this is where the positions of the two Ministries differ.

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