12 Oct 2018 15:49

Russian tax maneuver to deprive Belarus of $2 bln in implicit subsidies, compensation being discussed - Siluanov

MOGILEV. Oct 12 (Interfax) - The implantation of the tax maneuver in the Russian oil and gas sector will deprive Belarus of its implicit subsidy, and a compensation mechanism is currently being discussed, First Deputy Prime Minister and Finance Minister Anton Siluanov told reporters in Mogilev.

"Indeed, during the implementation of the tax maneuver, our partners, Belarus, will reduce receipts from the implicit subsidy which we provide as a result of the absence of export duties on oil and petroleum products. The overall volume of this subsidy today amounts to $2 billion per year," Siluanov said.

"This is the price of duty-free delivery of oil and petroleum products to Belarusian enterprises. Thus, the implementation of the tax maneuver will in the end lead to this implicit subsidy zeroing out. This will be done by 2024. Certainly, we are now with our Belarusian partners, with our colleagues preparing proposals regarding our financial relationship following the implementation of the tax maneuver," Siluanov said.

"There are no agreements thus far, we are waiting on proposals from the Belarusian side, and after this, we will formulate our viewpoint. And, within our bilateral commission, our high-level group, we will prepare a proposal for the Russian government leadership," Siluanov said.

"There's no [compensation] total now. At the moment, we have resolved that we will make our proposals next week," he said.

Siluanov also confirmed agreements with Belarus on settlements for 'recustoming' of oil. Earlier, Russia transferred funds for 6 million tonnes of oil shipped to Belarus that had been unpaid since July under the 'recustoming' scheme, Belarusian Deputy Minister Igor Lyashenko said.

"We agreed that we would transfer all those 'recustoming' monies that have been tied up with us as a result of us resolving our bilateral relationship. This is a total of $268 million," Siluanov said.

Belarus will receive 24 million tonnes of crude oil from Russia this year under the oil supply balance for 2018. In reality, Minsk will buy 18 million tonnes and the other 6 million tonnes will be 're-customed,' that is, the Belarusian budget will receive the export duties on that amount of crude. This system was agreed by the parties in April 2017.