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Russia, one of the top three oil exporters, is preparing for an important milestone: the Kremlin is on the verge of achieving the most intensive tax reform in the oil sector over the last 20 years.
Producers export crude oil and petroleum products duty free, thereby destroying financial resources for larger investments in deposits. At the beginning of next year, Russia will gradually start reducing its export duties on oil, according to Bloomberg
What changes will come into effect? , with the aim of eliminating them completely until 2024. At the same time, however, taxes on oil extraction will be increased, which will keep the tax burden on the country's producers.
The changes affecting the refineries are the most important, the new conditions increasing the price of processed raw materials. To reduce the negative effect on them, tax cuts will be announced for several types of refineries
The exemption will apply to companies that have invested a minimum of 60 billion rubles or $ 950 million to expand their business between 2016 and 2024. Support will also be provided to refineries subject to international sanctions. According to Bloomberg, this means that all major oil companies will enjoy tax benefits
. This is not the first step of Moscow towards the elimination of export rights in the sector. The previous attempt was in 1996, but it lasted a short time, the country was forced to buy back the levies because of the financial crisis of 1998.
In the last decade, Russia has increased its exports
exports about half of its oil yield. According to Pavel Sorokin, the head of the Ministry of Energy in the country, "it is unlikely that this share will change as a result of the tax reform", according to his calculations, refineries that will not be part of the country. exemption produce between 15 and 17 million tonnes. oil prices per year and many of them will stop working because of rising costs
It is important to note that under conditions of 15% price growth in the international market, producers National Expo
"The winner is the Russian budget and the losers are the consumers, mainly those of the Eurasian Economic Union, who will pay more for Russian oil," said Alexander Burganski of Capital Remembrance, an badyst based in London.
For Russia's trading partners in the Union, deliveries of Russian crude oil are currently not taxed. However, they refund export taxes on fuels processed and sold outside the Union
The Russian Ministry of Finance estimates that these duty-free supplies cost the Treasury about 140 billion rubles a year . After the reform, customers of Russian manufacturers will pay higher prices on the basis of the higher production tax
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