Russian MinFin not currently discussing tax hike for Alrosa, possible changes might be considered in fall

MOSCOW. July 14 (Interfax) - Russia's Finance Ministry is not currently discussing raising the mineral extraction tax (MET) for diamond miner Alrosa , possible tax changes will be considered in the fall after the main parameters of the next three-year budget plan become clear, Deputy Finance Minister Alexei Sazanov told reporters.

Asked if the MET for Alrosa is being discussed now, Sazanov said that "since the budget cycle is underway now, all issues will be considered in the fall."

"I did not say that there will be an increase for Alrosa. I can confirm that this issue is not even being discussed right now," he said.

Until there is clarity with the parameters of the budget plan for the next three years, "I can assure you [the issue of Alrosa] is not being discussed," Sazanov said.

Former Alrosa head Sergei Ivanov said in mid-May that a new MET hike for Alrosa was not on the table.

Alrosa paid an additional 19 billion rubles in MET in the first quarter of 2023 under changes to the Tax Code made at the end of last year. Although the MET usually goes into the regional budget, in this case the extra tax was split 46% to 54% between the federal government and Yakutia.

Alrosa now pays 8% of revenue in the form of the MET. Since 2021, the tax has been calculated based on actual selling prices, not prices in the Finance Ministry's pricelist as before, which increases the company's tax payments when diamond prices rise.