Russia's State Duma committee approves reducing mineral extraction tax for Gazprom on behalf of independent producers

MOSCOW. Nov 17 (Interfax) - Russia's State Duma Budget Committee at a meeting on Saturday approved amendments to the Tax Code to deduct additional revenue from independent gas producers arising from the accelerated indexation of regulated gas prices by 3 percentage points annually and simultaneously implement a mineral extraction tax deduction of 64 billion rubles for Gazprom in November 2026-August 2028, and then 5.5 billion rubles per month.

The government submitted the amendments for the second reading of bill No. 1026190-8 that is part of the budget package.

"This is a series of amendments related to our clarifying the procedure to tax the mineral extraction tax on gas production. We are introducing a new, additional coefficient that will allow us to deduct a portion of the gas price indexation [for industry], which will be implemented on the domestic market at a rate of 3% annually starting October 1 of next year. Accordingly, a special deduction is also being introduced for organizations that own the unified gas supply system, which will reduce the amount of mineral extraction tax payable by the relevant organizations. It [the deduction] would total 2.4 billion rubles per month next year, then 3.5 billion rubles in 2027, and, starting in 2028, 5.5 billion rubles per month," State Secretary and Deputy Finance Minister Alexei Sazanov said when presenting the amendment.

An Interfax source previously said that Gazprom's wholly-owned subsidiary, which holds a license to produce gas on the Yamal Peninsula and had initial gas reserves of over 3.5 trillion cubic meters at the beginning of 2024, will be able to receive a tax deduction of 2.44 billion rubles per month from November 1, 2026, to July 31, 2027, 3.5 billion rubles per month from August 1, 2027, to July 31, 2028, and then 5.5 billion rubles per month from August 1, 2028. Payments through August 2028 should total 64 billion rubles.

An Interfax source previously explained that from November 1, 2026, to July 31, 2027, Gazprom's wholly-owned subsidiary, which holds a license to produce gas on the Yamal Peninsula and has initial gas reserves of over 3.5 trillion cubic meters at the beginning of 2024, will be able to receive a tax deduction of 2.44 billion rubles per month; from August 1, 2027, to July 31, 2028, 3.5 billion rubles per month; and then from August 1, 2028, 5.5 billion rubles per month. In total, payments through August 2028 could total 64 billion rubles.