MINSK, Jan 10 (PRIME) -- Russia and Belarus will continue negotiations on compensation of Belarus’s losses from the Russian oil taxation changes, newswire Belta reported on Thursday quoting Belarusian President Alexander Lukashenko as saying.
“There was no refusal on the issue of compensation. Russia did not say, “No, we won’t compensate you for the deterioration of the situation, for the losses. Besides, the Russian president offered to continue the negotiations into the new year (in 2019) and to find an acceptable solution, both one on one and in workgroups,” Lukashenko said.
He ordered the government to compensate budget losses through other areas of cooperation with Russia and he said that Moscow is aware of the plan.
In December, Russian President Vladimir Putin and Lukashenko failed to align their positions on compensation for the Russian tax maneuver. Russian Finance Minister Anton Siluanov said that Moscow is ready to compensate Minsk for the changes by providing subsidies to Belarusian refineries only if the Russia–Belarus Union State continues to integrate on the initiative by Belarus.
In August, Putin signed into law a bill on the final stage of a tax reform, which implies reduction of the oil and oil product export duty by 5 percentage points annually from the current 30% within six years starting from 2019 and raising upstream taxation within three years.
For Belarus, the reform will mean a higher price of oil imported from Russia and a lower income from export duties on oil products, as Russia delivers 18 million tonnes of duty-free oil to the Belarusian refineries every year and additional 6 million tonnes participate in a re-export mechanism sending the export duties to Belarus’s budget.
Belarus estimates its losses from the Russian oil tax maneuver at up to U.S. $11 billion over six years and the 2019 budget’s losses at around $300 million.
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