14 Jan 2020 15:22

Belarus's environmental tax on oil transit could bring country $100 mln per year

MINSK. Jan 14 (Interfax) - Belarus's new environmental tax on the transit of oil and petroleum products through its territory and the increased profit tax for owners of pipelines could bring the country about 210 million Belarusian rubles (about $100 million) per year, a representative of the country's Finance Ministry told Interfax-West.

"We calculate that the budget will get about 210 million Belarusian rubles. This sum comes from the increase in the profit tax from 18% to 50% (about 120 million Belarusian rubles) and directly from the environmental tax: 90 million Belarusian rubles," the representative said.

The environmental tax rate is 0.35 Belarusian rubles for the transportation of 1 tonne of oil and/or petroleum products 100 kilometers. "In calculating and developing this rate, potential profit volumes for that kind of activity were analyzed," the representative said.

The environmental tax was developed over the course of 2019 and is "in no way connected with the negotiating process" on oil between Belarus and Russia, the representative said. The goal of the order is to provide "balanced budget execution, decreased dependence of its revenue on the situation surrounding external demand for commodities," the representative said.

The tax was introduced on January 1. President Alexander Lukashenko signed a relevant order.

A statement released by his press service read, "For the purpose of forming a source of funding for the elimination of potential environmental consequences in the event of an accident in a major oil pipeline or other unforeseen emergencies related to the transit of oil and petroleum products through Belarusian territory, organizations transporting oil and petroleum products will be subject to a 50% tax on profit," the statement said. The tax will also apply to the transit of oil and petroleum products through Belarusian trunk pipelines.

Gomeltransneft Druzhba and Zapad Transnefteproduct (a subsidiary of Russia's Transneftproduct) are subject to the tax, which will be paid to the federal budget on a quarterly basis.