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Russia does not mull raising tax burden for oil, gas — energy minister

The energy minister confirmed earlier report that the authorities will unlikely agree on the new system of taxation in oil sector in 2016, switch to tax on additional income in 2017

© EPA/STEFAN SAUER

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Kremlin makes no decision on increasing taxes in Russia after 2018

ATHENS, May 27. /TASS/. The Russian government is not considering an option to increase tax burden for oil and gas sector, Russia’s Energy Minister Alexander Novak told reporters.

"Currently, we do not plan to increase tax burden," he said, adding that the government has not received any proposals to adjust tax maneuver either.

Earlier Deputy Prime Minister Arkady Dvorkovich said that the government did not plan to raise taxes in oil sector.

Earlier TASS reported citing sources, that the Finance Ministry and Energy Ministry will unlikely agree on the new system of taxation in oil sector in 2016. Respectively there won’t be switch to tax on additional income in 2017.

The government is not satisfied with existing tax regime in oil sector, which consists of various taxes and does not take into account complexity of development of different fields, as well as their profitability. Such tax treatment reduces the interest of companies in the development of new deposits.

So far, the Finance Ministry and Energy Ministry failed to agree on the parameters of a new tax system for oil companies. The dispute has been on for two years.

The Energy Ministry and oil companies urge the start of a large-scale reform of taxation in oil sector already this year. The reform should be based on taxation of net income. The main objective of the reform is to prevent the fall of production in traditional areas and to switch from tax on revenues to taxes based on the profits from the activities of oil production.

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