6 Jun 2024 15:57

Gas for ammonia excise has upset the applecart, many models no longer count - EuroChem chief

ST. PETERSBURG. June 6 (Interfax) - EuroChem hopes for constructive dialogue with the government on the proposed excise tax on gas for ammonia processing.

"I'm not even talking about the excise tax, which has arisen and has totally upset the applecart, and many of our models no longer count," Oleg Shiryaev, CEO of EuroChem, said during the "Russian Gas Chemicals: Challenges and Prospects" session as part of the St. Petersburg International Economic Forum.

"We hope that dialogue with the state will be constructive, and we will come to decisions with gas suppliers that will allow us to make our projects pay off, and then this will open up the opportunity for investment in general," he said.

"Our position is clear: the fertilizer industry has been the lucky one, which was highlighted as part of this tax maneuver, one of the few sectors. In general, it is very important to level out and go through universal means. Our proposal was to look more at unified taxation within the framework of income tax, VAT," he said.

The Russian government this week introduced amendments to the Tax Code to the State Duma, establishing that excise tax on natural gas (APG) to produce ammonia will be 2,400 rubles per thousand cubic meters from January 1, 2025.

The rate is a fixed (specific) rate, while the previously planned calculation of the rate from 2026 according to a special formula is removed.

The document (No. 639663-8) was posted in the parliament's electronic database.

"Revenue from excise tax on natural gas purchased to produce ammonia is estimated at about 43.4 billion rubles per year, and 130 billion rubles for 2025-2027," an explanatory note says.

Previously, it was thought excise on natural gas to produce ammonia would be 1,200 rubles per thousand cubic meters from January 1 to December 31, 2025 inclusive, while from January 1, 2026 it was supposed to be based on a special formula with an indexation coefficient. Revenues from the excise taxes had been estimated at about 21.7 billion rubles annually.