Russia's State Duma proposes levying additional MET on gold to provide federal budget 15 bln rubles by end of year - bill
MOSCOW. April 5 (Interfax) - Russia's State Duma committee on budget and taxes during a meeting on Friday approved an amendment to the Tax Code, according to which, from June 1 to December 31, 2024, inclusive, an additional coefficient for gold mining will be introduced to the mineral extraction tax (MET) totaling 78,000 rubles per 1 kg in order to compensate the federal budget for the shortfall in revenues owing to the drop in exports of gold.
State Duma budget committee chairperson Olga Anufriyeva proposed the amendment during the second reading of Bill No. 512729-8.
"A situation has developed in the gold export market. Unfortunately, for some reason, we practically do not export gold, and all the planned federal budget revenues that were planned from export customs duties on gold are not being collected. Therefore, a solution has been proposed, as developed with the industry and with the government, to amend export the customs duties on MET from the gold mining organizations," Anufriyeva said at the meeting.
"The fact is that after export duties on gold were introduced, gold exports hit zero in the literal sense of the word, because, as you know, we had implemented an amendment the year before last. Banks may currently sell gold to individuals VAT free. Accordingly, they [the banks] then immediately began to offer small discounts to the price of gold on the domestic market because of the duty. Because of this, individuals began to buy gold through banks, and our gold exports practically stopped, they ceased," State Secretary and Deputy Finance Minister Alexei Sazanov said at the committee meeting.
Sazanov said that a meeting was held with Finance Minister Anton Siluanov and the representatives of the largest gold miners upon the instructions of Prime Minister Mikhail Mishustin, during which a compromise solution was developed.
"We still expect money from them. We need revenues. We agreed that they would pay us 15 billion rubles by the end of the year. Absent exports, it was decided to raise the MET in order to ensure that these revenues were available, and a guaranteed 'markup' has been implemented accordingly, set, in order to collect 15 billion rubles, and not be tied to export volumes. This was done in relation to production volumes at 78,000 rubles per 1 kg, or 78 million rubles per tonne of mined gold," Sazanov said.
Interfax has reviewed the amendments to the Tax Code, and they stipulate that the amount of MET for mined gold from June 1 to December 31, 2024, inclusive, will increase by the value of the Kdrm indicator, as determined by the formula Kdrm = Vdrm x 78000. This means increasing the MET for minerals as specified in the Tax Code, namely intermediate products containing one or more precious metals, such as gold, silver, platinum, palladium, iridium, rhodium, ruthenium, and osmium, as obtained when completing a set of operations to extract precious metals, including alloy gold, which is an alloy of gold with chemical elements, spot or native gold, which meets the national standard.
No corresponding amendments on the modification of export customs duties on gold were presented during the committee meeting on Friday.