Official: Russia unlikely to introduce new oil taxation in 2017

MOSCOW, Sep 8 (PRIME) – Russia is unlikely to launch a new oil taxation system in 2017, Deputy Prime Minister Arkady Dvorkovich told reporters on Thursday.

“I do not know. It is possible in principle that the law will be adopted but I am not sure that it will start to be implemented next year since some by-laws need to be adopted as well,” Dvorkovich said.

He also said that he had given an order to elaborate the by-laws within a month.

The government has to tailor the existing mineral extraction tax (MET) individually for each project. The Energy Ministry earlier proposed replacing the outdated MET with an oilfield profit tax, or a tax on oil sales revenue minus development and delivery expenses, for brownfields. The Finance Ministry made a counterproposal to apply an added income tax, or the difference between the cash flow and capital expenditures.

Energy Minister Alexander Novak said that the two ministries had developed a new tax during the discussions and now are arguing on how to make the transition to it.

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