Ministries, oil and gas companies to discuss changes to taxation Wednesday
MOSCOW. July 8 (Interfax) - The Russian ministries and oil and gas companies will start discussing potential changes to tax law in the oil and gas sphere on Wednesday, the Energy Ministry told Interfax.
Representatives of the relevant ministries, as well as fuel and energy companies, will participate in the meeting.
On the meeting's agenda is an initiative by Russian state-owned oil company Rosneft voiced by its President Igor Sechin at the St. Petersburg International Economic Forum (SPIEF) in June to reduce the tax burden on the oil industry from 55% to 46%.
According to a presentation published on Rosneft's website, the current taxation level of more than 55% of revenue is inefficient because it does not ensure maximal budget revenues from the oil industry.
"A tax burden level of 45% would provide the maximal budget revenue directly from the oil industry," the document said.
That said, "maximal full budget revenue (both from the oil industry and from all other economic sectors related with the system of linkages with the oil industry) is ensured at a taxation level of 35%," Rosneft said.
By reducing the average tax burden from 55% to 45% through larger investments and, in consequence, large quantities of oil production, the budget would directly receive over 3 trillion rubles extra from the oil industry in 2014-2030, the Rosneft report said.
"A reduction in the average tax burden to 35% (that is, to the level in effect for the gas industry) would lead to an even larger effect for the budget - at least double due to the effect of inter-sectoral linkages (the multiplier effect)," the document said.
In exchange for a significant reduction in the tax burden on the oil industry, companies should be willing to commit to ensuring a multiplier effect for the state budget. Such commitments could be assumed in the form of legally binding agreements between companies and the tax service, Sechin said in the report.