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Russia considering more tax on oil products-paper

Published 10/12/2010, 01:11 AM
Updated 10/12/2010, 01:16 AM
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MOSCOW, Oct 12 (Reuters) - Russia's Energy Ministry has proposed raising tax on oil products and reducing duties on crude oil, potentially earning an extra 8.55 trillion roubles ($286 billion) for the state over 10 years, Vedomosti reported.

The ministry has suggested reducing the maximum level of oil export duties -- a key expense for producers -- to 55 percent from 65 percent, according to documents obtained by the paper.

For new fields -- which Russia seeks to develop to keep production levels as older deposits are used up -- the current minerals extraction tax could be replaced with a 27 percent excess profit levy, Vedomosti said in its Tuesday edition.

It did not say by how much duties for oil products would be increased, but said the Energy Ministry's proposals -- due to be discussed at a meeting with the Finance Ministry officials -- would boost the budget coffers by 8.55 trillion roubles over 10 years if they are introduced from 2012.

The Finance Ministry however may not agree to lower revenues in the short-term in exchange for more gains in the future as it is determined to eliminate Russia's budget deficit by 2015.

Vedomosti also said that by shifting the tax burden more towards oil products and away from crude, the proposals also contradict the government's ambition to stimulate exports of goods with a higher added value. (Writing by Toni Vorobyova; Editing by Tomasz Janowski)

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