Finance Ministry to prepare proposals on gas NRET formula by Nov 1
MOSCOW. Oct 3 (Interfax) - The Russian Finance Ministry will submit proposals to the government on a formula to calculate the natural resources extraction tax (NRET) for gas by November 1, Ilya Trunin, the head of the Finance Ministry's tax and customs policy department, said at parliamentary hearings at the Federation Council.
"We haven't arrived at a universal formula for calculating the rate yet. The Finance Ministry should submit the relevant proposals to the government by November 1," he said.
This formula should be based on ensuring a balanced budget, he added.
The lack of a long-term forecast for domestic gas prices has complicated the process of developing a formula, Trunin said.
At a fixed NRET rate, the Finance Ministry is discussing differentiating the tax depending on costs associated with production at various fields.
So far there are no clear proposals on differentiating the NRET and supporting investments in new fields. Any decisions should be made in fulfillment of the established budget targets, Trunin said.
At the hearings, Deputy Director of the Energy Ministry's Department for Pricing Conditions Andrei Tereshok said that the Energy Ministry has selected 14 projects for calculating a new tax burden on the gas sector. These projects could result in up to 70 billion cubic meters of additional gas production, he said.
Tereshok said that proposals on the new tax approach to the gas industry will be crafted in the middle of October and submitted for discussion by ministries and companies, after which they will be sent to the government.
The formula for calculating the NRET rate for gas should enter into force in 2014.