MINSK, June 1. /TASS/. Belarus and Russia have reached an agreement in principle on how to minimize the losses Belarusian oil refineries incur due to Russia’s tax maneuver from January 1, 2022, the BelTA news agency reported following a cabinet meeting chaired by President Alexander Lukashenko.
"We found a solution to the tax maneuver. Not even we did it, but the governments [of Russia and Belarus], we only approved it. We will continue to conduct a dialogue and negotiate," BelTA quotes Alexander Lukashenko as saying.
In 2018, the Russian authorities decided to carry out a so-called tax maneuver related to the oil industry. It provides for a step-by-step reduction of oil export duty from 30% in 2019 to zero by 2024 and a simultaneous increase in the mineral extraction tax (MET).
While Russian oil refineries receive compensation for losses due to the tax maneuver, Belarusian refineries do not receive benefits, and the price of oil for Minsk is as high as on the global market. This makes the re-export of oil products unprofitable.
After Russia introduced the tax maneuver, the Belarusian budget lost an important part of its income. Russia supplies oil to Belarus, as well as to other EAEU countries, without duties. Oil is exported from Belarusian refineries, which is already subject to a duty.
The Belarusian authorities have estimated the damage from the tax maneuver at $11 billion by 2024.
In December 2018, Presidents of Russia and Belarus, Vladimir Putin and Alexander Lukashenko, decided to set up an intergovernmental working group for the development of integration. By November 1, 2019, the parties have prepared 31 draft roadmaps with a list of measures to create common markets in various sectors of the economy.
By December 2019, the governments of the two countries approved most of the roadmaps presented by the working group, but failed to agree on some of them. Minsk links the deepening of integration with a lower price for Russian gas, payment of compensation for losses caused by the tax maneuver, and the lifting of restrictions on the supply of its products to the Russian market.