28 Jul 2010 18:51

Privileges for firms involved in capital-intensive oil projects to stay in effect

MOSCOW. July 28 (Interfax) - Prime Minister Vladimir Putin on Wednesday promised that tax concessions for oil and gas companies involved in capital-intensive field development projects will remain in effect next year but said the government had decided to raise the mineral resources extraction tax and "some other levies on oil and gas companies."

Putin, who made the announcements at a meeting of a budget amendments commission, mentioned that when the global financial crisis broke out, the government significantly cut taxes such as profit tax, income tax on small businesses and taxes on oil and gas companies.

Russia would continue to revise its tax system, he said. "Namely, extra preferences will be given to innovative businesses and companies that use energy-saving equipment."

As for the tax raises that he had announced, he said those were needed to "fully carry out plans that have been declared, raise pensions, improve the standards of hospitals and outpatient clinics, build housing, and solve other urgent problems."

"The state must have enough funds available, and we have no right to recur to borrowing too much. What such an irresponsible policy leads to is clear both from our recent history and from the example of some foreign states," Putin said.