August 10, 2018 / 7:22 AM / a month ago

NLMK's Lisin warns against higher Russian mining taxes

MOSCOW, Aug 10 (Reuters) - Hitting Russian mining and metals companies with extra taxes because they are making profits will only encourage them to be less efficient, according to billionaire Vladimir Lisin, who controls top steel producer NLMK .

“The proposed method of creating an extra tax base looks like an encouragement for inefficiency: the lower the profitability, the lower the tax that needs to be paid,” Lisin said.

Russia is considering bolstering the state budget by raising more revenue from metal and mining companies that are earning windfall profits, according to proposals seen by Reuters.

Lisin, who is also president of industry association Russian Steel, said the proposed measures need to be refined.

The proposals, which did not specify how extra revenue would be raised, were set out in a letter to Russian President Vladimir Putin from Kremlin economic aide Andrei Belousov.

Three industry sources told Reuters they had either seen the letter or were aware of it.

Belousov, the finance ministry’s press service and Kremlin spokesman Dmitry Peskov could not be reached for immediate comment.

Russia needs additional budget revenue to meet economic goals set in decrees signed by Putin for his new six-year term. The government has already announced plans to raise Russia’s value-added tax from 2019.

$1 = 66.4525 roubles Reporting by Gleb Stolyarov; writing by Andrey Ostroukh; editing by Jason Neely

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