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UPDATE 1-Russia FinMin could row back on gas tax hike
May 30, 2012 / 10:48 AM / 5 years ago

UPDATE 1-Russia FinMin could row back on gas tax hike

* Russian govt at odds whether tax rate will be equal for state, private gas producers

* Oil, gas exports are vital for Russian commodities-fuelled economy (Updates with background, details)

MOSCOW, May 30 (Reuters) - Russia’s finance ministry could take a second look at plans to increase mineral extraction tax on gas which would have raised rates most sharply on independent producers such as Novatek, Russia’s deputy finance minister said on Wednesday.

The government has already approved the rate increases planned for 2013-2015, but the decision has not passed a vote in the State Duma, Russia’s lower house of parliament.

The deputy minister, Sergei Shatalov, said the rates could be reduced from those planned levels without an overall reduction to planned additional budget revenue, but precise changes to the approved rates had not been decided.

“Theoretically, this (change to mineral extraction tax rates) is possible,” he told reporters.

He said the government was debating whether to bring in line the rates paid by state-run monopoly Gazprom and independent producers such as Novatek , or make Gazprom pay a higher share than its independent peers.

The government decided earlier this month that Gazprom would pay 1,000 roubles per 1,000 cubic metres 2015, and independent producers led by Novatek would pay almost the same, which for them is a fourfold rise from current levels.

The tax hike is widely seen as a Kremlin attempt to replenish the state budget, after Prime Minister Vladimir Putin embarked on heavy spending ahead of his election as president in March.

Russia’s budget income, largely reliant on hydrocarbon exports, is sensitive to global crude price hikes, which are widely seen as a challenge to relative economic stability. (Reporting by Darya Korsunskaya; Writing by Melissa Akin and Alexei Anishchuk; Editing by Maria Kiselyova and Will Waterman)

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