PRESS: Russian Fin Min can extend higher oil, gas MET for 2017

MOSCOW, Aug 25 (PRIME) -- The Russian Finance Ministry has prepared a draft order prolonging an increased rate of the mineral extraction tax (MET) on oil and gas, which was planned to be a one-time budget fix in 2016, for 2017, business daily Vedomosti reported on Thursday, citing three government officials and a participant of the debates as saying.

The measure can help the government to collect an extra 170 billion rubles from gas giant Gazprom and 200 billion rubles from oil companies. A tax reform switching some oilfields to an added income tax from the MET will reduce the income by 50 billion rubles, meaning the total effect of the measure is expected at 320 billion rubles, the sources said.

The increased MET rate is almost decided upon, it is time to announce the decision, the government officials said.

One government official said that the state wanted to receive 200 billion rubles from the higher MET on oil companies in 2016 but apparently is unable to do so because its revenue from export duties decreases due to falling oil prices. This time the MET is to be set in absolute figures.

The Finance Ministry said in response to a Vedomosti request: “The federal budget preparation process is going on, we are discussing possible decisions to balance it.”

An official close to the Energy Ministry said that the measure could undermine efforts to privatize Bashneft and Rosneft with a profit because foreigners are wary of such frequent changes in rules of the game.

(64.8140 rubles – U.S. $1)

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