A tax increase on oil production will bring to the budget of 1 trillion rubles

Additional taxes on oil can increase the burden on industry to 1 trillion rubles by the companies Themselves in response to warn of production cuts.

According to the newspaper “Kommersant”, the Ministry of Finance to reconsider the tax formula on oil production with its cost of $50 per barrel can increase the tax burden on 650 billion rubles, and at $30 a barrel — at 1 trillion rubles Thus, the government will receive additional sources of revenues from one industry that has benefited from the devaluation of the ruble.

However, oil companies warn that the government initiative will lead to negative consequences. “Everyone is taken in taxes, the ruble will lead to lower oil production in Russia”, — said the interlocutor of the newspaper in one of the oil companies. “If the money taken out, the industry will rise, and the budget problem is still not solve,” — said “Kommersant”, the representative of another company.

The oilers are thereby repeated its arguments made in the September letter to Vladimir Putin. Then they warned that changes in the calculation of the met rate will be equivalent to a corresponding reduction of investment in the industry amounting to 2 trillion rubles. “the Drop in investment will result in a decrease in the production of more than 100 million tons for the years 2016-2018, and lost income in this case will exceed 1.3 trillion rubles,” warned oil industry workers the head of state.

“In the current situation, tax increases were predictable, but the bad news is that the constant change of conditions does not give the business long-term understanding on what to focus,” says chief economist at Vygon Consulting Sergey Ezhov. He noted that the reduction of the deduction of mineral extraction tax will not wear at least formally, of a temporary nature, as last year’s freeze export duties on oil. This means that the number of profitable projects in the case of growth of mineral extraction tax will be reduced and “this can have a direct impact on the dynamics of oil production”, the expert believes.

January 29, Reuters with reference to sources in the Ministry of Finance and the Ministry of energy announced the government’s plans for reform, which may lead to cancellation of benefits for a number of fields. According to Vygon Consulting, a total of various tax concessions now apply to 198 fields in Russia.