Putin's aide opposes further tax increases in Russian oil sector

Nov 03, 2004 01:00 AM

Oil tax hikes are making the Russian oil sector less attractive for investors, said Arkady Dvorkovich, head of the expert department at Russia's Presidential Administration. Dvorkovich was speaking at an economic conference on Nov. 2.
The Russian government should not continue to increase the tax burden for oil companies, Dvorkovich said, adding that Russia's oil taxes are now at a level comparable with other oil-producing countries. Now it is necessary to keep oil taxes at the same level for several years, said the presidential aide.

This year Russian oil companies have experienced both a heavier tax burden and less toleration for tax planning from the Russian tax authorities. In spring the parliament passed a law which increased oil export duties and changed the formulas to calculate the tax rate. The taxes were effectively tied to surging world oil prices.
On Oct. 1 oil export duty was changed to $ 87.9 per ton, up from $ 69.9 per ton during the period between Aug. 1 and Sept. 30. On Nov. 1, oil export duties were hiked even higher, to a level above $ 100 per ton. At the beginning of the year, in the period from Feb. 1 to March 31, export duty stood at $ 33.9 per ton.

In addition to this Russian oil companies have started to shy away from aggressive tax planning practices following allegations and accusations against Russia's biggest oil exporter Yukos Oil Company. Yukos has been accused of tax evasion by using so-called domestic offshore companies and hit with a back tax bill of $ 17 bn for the years 2000-2002.
Recently, another presidential aide Igor Shuvalov advised oil companies to check their taxes in order to avoid suffering the same fate as Yukos.

Source: MosNews
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