RSPP proposes to peg mineral extraction tax on coal to Russian price indicator instead of FOB Australia

MOSCOW. Nov 1 (Interfax) - The Russian Union of Industrialists and Entrepreneurs (RSPP) has proposed to stop using the FOB Australia Premium Coking Coal index for calculating the mineral extraction tax (MET) on coking coal and instead peg it to a Russian price indicator.

The proposal is included in the big business lobby group's opinion on the draft guidelines for Russia's budget, tax and customs tariff policy in 2024 and the planning period of 2025-2026, which was posted in the State Duma's database.

The Australian indicator, which is used to calculate the MET, "is not relevant for Russian coking coals and objectively does not reflect prices for Russian coal," the RSPP said. It proposed instead to base the tax on the average price for coking coals based on the territorial exchange index of prices for domestic market and export coal in the Kuznetsk Basin that is compiled and published by the St. Petersburg International Mercantile Exchange (SPIMEX).

A higher MET on coal has been in effect since the start of 2022. The rate for coking coal is 1.5% of the average price based on FOB Australia Premium Coking Coal quotes, whereas previously a fixed rate of 57 rubles per tonne was used. Furthermore, a higher MET rate on coal in the amount of 380 rubles per tonne was imposed from January 1 to March 31, 2023.