Duma committee approves zero MET rate for Gazprom's Chayanda, Kovykta fields for 15 yrs
MOSCOW. Nov 5 (Interfax) - The State Duma's Budget and Taxes Committee approved at a meeting on Wednesday an amendment that would zero out the mineral extraction tax (MET) for gas from the fields that will supply the Power of Siberia pipeline with gas for China.
The amendment would set the MET rate to zero for the first 15 years of development of fields located wholly or in part in Irkutsk region or Yakutia. The MET rate would grade up to the regular rate in the 10 ensuing years.
"This tax break is necessary to demonstrate the Russian side's readiness to stimulate the project," the head of the tax policy department at Gazprom , Karen Oganyan, said at the committee meeting. "I would like to say, under existing agreements, the Chinese side will provide reciprocal Chinese tax breaks on the gas being imported," he said.
Deputy Finance Minister Sergei Shatalov said the tax break would be budget revenue neutral.
The export project will also benefit from a zero property tax rate to 2035 on trunk gas pipelines and related facilities that are an integral technological component of the pipeline, gas production facilities, helium production and storage facilities, whose construction is being carried out under the Power of Siberia pipeline project.
The amendments are additions to an existing bill containing Tax Code amendments, including the tax maneuver in the oil sector, introduction of an excise tax on gas deliveries on the Blue Stream pipeline to Turkey, and indexation of excises on alcohol and tobacco.