Russian MinFin ready to consider extending deferral of excise on steel, mineral extraction tax on iron ore, but no proposals received so far - Sazanov
MOSCOW. Oct 16 (Interfax) - The Russian Finance Ministry could consider extending the deferral of excise tax payments on steel and mineral extraction tax on iron ore, but no such requests have been received so far, Deputy Finance Minister Alexey Sazanov told reporters on Wednesday.
"This will depend on the industry's request. If the industry requests it, they will present a financial and economic justification, and we will consider it. So far, no such requests have been received," he said, when asked whether the deferral of excise taxes and mineral extraction tax was a one-off measure.
Sazanov also said that the decision on the deferral is an "absolutely mirror matter" as regards the coal industry. As reported earlier, all coal companies will get a deferral on the mineral extraction tax and social security contributions until December 1. Companies with large debt burdens will be given the opportunity to restructure their debt. Siberian coal companies will be compensated for 12.8% of the rate for export shipments of coal by rail on the northwestern and southern routes.
This week the Finance Ministry said it had drafted a resolution to provide support to the steel industry, proposing to defer payments of the excise on liquid steel and mineral extraction tax on iron ore until December 1, 2025. The resolution will go into effect on the day of its publication.
"The need for such support was identified when analyzing the financial health of companies and current compliance practice. The implementation of the decision will enable metallurgical enterprises to free up working capital to overcome the consequences of the situation in their business activities and stabilize financial indicators," the ministry said.
Kommersant, citing a copy of the document, reported earlier that the government was drafting such a resolution. Industry and Trade Minister Anton Alikhanov said last week that the deferral of the steel excise until December 1 was insufficient to support the industry.
The steel excise, which was initially considered a temporary measure, was introduced as of January 1, 2022. Under the formula for calculating the excise for vertically integrated steelmakers, it 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. Industry association Russian Steel reported that the production cost for slabs, even at the most efficient Russian steel plants, exceeded 40,000 rubles per tonne in 2024.
