Russia to revise steel excise formula in Jan, fiscal optimization needed with current exchange rate - minister
ST. PETERSBURG. June 17 (Interfax) - Russian government agencies continue to work on revising the formula for calculating the excise tax on steel and plan to introduce the new threshold value in January 2026.
"Changes to the Tax Code are already in the works for indexing the cut-off for slab prices below which the excise on liquid steel is not paid as of January 1, 2026. The parameters of this revision are being worked out," Industry and Trade Minister Anton Alikhanov told Interfax.
"The current level of the national currency's exchange rate is, unfortunately, essentially prohibitive for exporters. In this situation we believe it is right to work on optimizing the fiscal burden on the steel industry and reducing regulatory costs," Alikhanov said.
The Industry Ministry said back in the spring that the government might introduce automatic adjustment of the parameters for calculating the steel excise taking into account resource and non-resource components.
The ministry has said repeatedly that it supports revising the threshold for the liquid steel excise, which is currently 30,000 rubles. This cut-off 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 and since the beginning of this year 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.
The excise formula for electric furnace steel is different. It is calculated as 0.3 of the difference between the average export price for steel billets on FOB terms in ports in the Southern Federal District and the sale price of steel scrap in the Ural Federal District, as well as half the cost of buying ferroalloys and alloying elements used to make steel products. The spread between the price of billets and scrap at which the excise is in effect is 12,500 rubles. Electric furnace steel producers did not pay the excise in April.
