Russian agencies working on formula to automatically adjust steel excise threshold

MOSCOW. March 13 (Interfax) - The Russian government might introduce an automatic adjustment of the parameters for calculating the excise tax on liquid steel taking into account resource and non-resource components.

Government agencies are now working on such a formula, the Industry and Trade Ministry told Interfax.

"Concrete proposals are now at the stage of discussion. Right now this involves working out a formula for an automatic adjustment of the indicator based on the indexation of many parameters of both resource and non-resource components with the participation of relevant agencies," the ministry's press service said.

The ministry said that, "like before, [they] support the adjustment of the threshold for the excise on liquid steel, which is now 30,000 rubles."

This cut-off threshold was set for vertically integrated steelmakers at the end of 2022. Under the approved formula, the excise drops to zero if the export price for slabs in the calendar month (Tsslab indicator), multiplied by the average U.S. dollar/ruble exchange rate for the calendar month, is less than 30,000 rubles. In 2024, the threshold value for calculating the excise stayed above this level.

At the end of last year, sources told Interfax that steelmakers wanted to raise the threshold price for slabs at which the steel excise kicks in to 60,000 rubles from the current 30,000 rubles. The president of Russian Steel, Alexei Sentyurin said in January that the industry association presented calculations according to which the minimum threshold for a zero steel excise should be raised to at least 54,000 rubles.

The Finance Ministry has consistently opposed revising the excise. Deputy Finance Minister Alexei Sazanov confirmed this position in late February, saying that the "budget has been formed for three years, there is no potential for reducing the revenue base, the budget already has a deficit."

However, Interfax sources said a decision to revisit the possibility of adjusting the formula for calculating the excise on liquid steel was made at the end of February at a meeting with Deputy Prime Minister Alexander Novak as part of the work of the sub-commission on the stability of the financial sector and other sectors of the economy.