Rosneft proposes reducing gas tax hike for independent producers - paper
MOSCOW. Oct 25 (Interfax) - Rosneft has proposed amendments for the second reading of the bill to raise mineral extraction tax (MET) rates on gas for 2024, national daily Kommersant reported on Wednesday, citing a letter the oil company sent to the State Duma on October 20.
Rosneft proposes make the tax hike equal for both independent gas producers and state gas giant Gazprom , and to not raise the tax on gas that goes to power plants and the housing and public utilities sector. The company also suggested the government look at banks' windfall profits as a way to finance the budget deficit, the paper said.
The bill, which was passed in the first reading on October 17, will increase the MET rate on gas as of January 1, 2024 by raising the Kkg coefficient used to calculate the tax rate. The MET hike is part of a maneuver to collect additional revenue from gas producers that they will earn thanks to the faster indexation of wholesale gas prices for industry and households.
The mechanism that provides for an additional increase in gas prices for households and industrial customers is factored into the social and economic development forecast for 2024-2026 that was presented to the Duma as part of the three-year budget plan (No. 448554-8). The bill passed in the first reading (No. 448566-8) includes a mechanism where part of the resulting additional revenue that will be earned by Gazprom and independent producers will be collected for the budget through the MET increase.
The forecast for 2024-2026 shows that the authorities plan to raise wholesale gas prices for industrial consumers other than the electric power industry by 10% as of December 1, 2024, and as of July 1, 2024 wholesale prices for all categories of industry will be indexed by 11.2% instead of the previously planned 8%. In 2025, they will be indexed by 8.2% instead of 8%.
The bill passed in the first reading will revise the multiplying coefficient for the MET, Kkg, in the Tax Code. For owners of the Unified Gas Supply System, meaning Gazprom, it will be set at 303 in the first half of 2024, 454 in the second half of 2024, 428 in the first half of 2025, 448 in the second half of 2025 and 464 from January 1, 2026, while for independent producers it will be set at 555, 706, 779, 799 and 863, respectively.
The Duma Budget Committee said in its opinion on the bill that the differentiation of the MET hikes for Gazprom and independent producers is needed to even out the economic conditions for doing business.
According to the presented financial rational, this revision of the Kkg coefficient is expected to generate about 116.8 billion rubles of additional revenue for the federal budget in 2024, 127.3 billion rubles in 2025 and 134.7 billion rubles in 2026. However, the Audit Chamber said in its review of the bill that explanatory materials for the draft budget for 2024-2026 state higher revenue figures from the additional indexation, of 121.6 billion rubles in 2024, 147.8 billion rubles in 2025 and 166.9 billion rubles in 2026.
Deputy Finance Minister Alexei Sazanov said earlier that Gazprom's will earn about 120 billion-130 billion rubles per year from the additional indexation of gas rates in 2024-2026, but more than 90% of this extra revenue will be collected for the federal budget through the planned MET hike.