Discussion on introducing windfall profits tax for new oil fields to continue in 2012 - ministry
MOSCOW. Jan 11 (Interfax) - The discussion on introducing a windfall profits tax for new oil fields will continue in 2012, Ilya Trunin, the head of the Russian Finance Ministry's tax and customs policy department, told journalists.
The Finance Ministry has been pushing for such a tax for 12 years, he said. Lately, it has spoken in favor of initially introducing it only for new fields.
"These plans will not disappear. Yes, it's possible for new fields - we simply need to understand the parameters, what the tax will be, how we will levy it," Trunin said.
As of yet, there is still no uniform understanding of the issue among the authorities - not even between the Finance Ministry and the Federal Tax Service, let alone the Economic Development Ministry, the Natural Resources Ministry and the Energy Ministry, he said. "Everyone has their own view on what exactly a windfall profits tax is," he said.
Overall, everyone understands that the tax would allow for applying, at the beginning and end periods of developing new fields, a minimal tax rate - "much lower than the current taxes," he said. However, when production is at its highest, taxes would be levied that are much higher than those envisaged under the current taxation system, Trunin said.
In such a way, income from developing fields would not change on average over the entire course of the fields' development. However, during certain periods, tax payments could differ from what they are now, he said.
"But how to fit this tax into the current system, whether it should be a new tax, how it should coexist with export duties, how to administer it - that is the question," Trunin said.
At the moment, differentiated natural resources extraction taxes and export duties are applied for those fields in need of support. "We are giving more and more such breaks. We don't like that. We say, let's move to a windfall profit tax, but the discussion continues," he said.
