Russia to compensate tax reform to Minsk if sees integration steps

MOSCOW, Dec 25 (PRIME) -- Russia is ready to compensate Minsk for oil industry tax changes by providing subsidies to Belarusian refineries only if the Russia–Belarus Union State continues to integrate on the initiative by Belarus, Finance Minister Anton Siluanov told reporters on Tuesday.

“We should understand what we shall subsidize our partner, our neighbor for,” Siluanov said. “If we subsidize oil refineries of Belarus, that is a deep element of integration. So we cannot consider one-sidedly here.”

In August, Russian President Vladimir Putin signed into law a bill on the final stage of a tax reform, which implies reduction of the oil export duty by 5 percentage points annually from the current 30% within six years starting from 2019.

For Belarus, the reform will mean a higher price of oil imported from Russia and a lower income from export duties, as Russia delivers 18 million tonnes of 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.

Moscow promised to compensate Belarus for the loss but on December 1 Belarusian Deputy Finance Minister Yury Selivyorstov said that the compensation mechanism had not been agreed upon.

Deputy Prime Minister of Belarus Igor Lyashenko said in December that Russia refused to discuss compensation to Belarus for losses from its oil taxation changes in late November.

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