ASTANA, Aug 14 (PRIME) -- Russia’s Energy Ministry expects that the added income tax oilfields will be introduced for oilfields until December 2017 so that it can start applying it in a pilot mode from 2018, First Deputy Minister Alexei Teksler told reporters on Monday.
“As you know, the Budget Code obliges us to submit the (state) budget no later than in a month after adoption of the latest tax law. Taking into account the stage of added income tax readiness, we think we must adopt it this year. We will initiate a temporary suspension of this norm of the Budget Code in order to approve the draft law until December 1,” Teksler said.
He also said that some disagreements with the Finance Ministry over the terms of the tax remain but are ‘quite technical.’
Now 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 The Energy Ministry earlier proposed replacing the outdated MET with an oil field profit tax, or a tax on oil sales revenue minus development and delivery expenses, for brownfields.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.
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