PRESS: Russia may launch added income tax in oil sector in 2018

MOSCOW, Sep 14 (PRIME) -- The Russian government may introduce a new taxation regime for the oil sector, or a tax on added income, this year, but it will be applied only from 2018, Kommersant business daily reported Wednesday citing a protocol of a recent meeting chaired by Deputy Prime Minister Arkady Dvorkovich.

The new tax will substitute existing tax incentives on some fields with a tax collected from the field’s cash flow. The new tax will allow the Finance Ministry to abolish the oil export duty and will add about 600 billion rubles of budget revenue, the business daily reported.

The draft bill on the new tax is to be prepared by October 1. It will come in force in 2017, but in fact it will be applied to oil fields only from 2018, Kommersant said. The tax is to substitute preferences on oil export duty and the mineral extraction tax for green fields, but pilot projects to apply the tax on brown fields that do not use tax preferences are also planned.

Dvorkovich also ordered the Finance Ministry to develop special parameters of the new tax for green fields in West Siberia with a depletion rate of less than 5%. Kommersant reported that the request regards oil major Lukoil’s wish to include the Imilorskoye and Shpilman fields into the new tax regime, but the business daily’s sources doubt that it will happen as it contradicts the idea of the tax, which is to avoid selective provision of preferences.

(64.8102 rubles – U.S. $1)

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