The Russian authorities are looking for ways to sharply increase budget revenues, which is highly likely to become a deficit in the coming years. In order to increase revenues, the government intends to increase the tax burden on the oil and gas industry to such an extent that even ordinary Russians can feel the consequences – the increase in taxes on the industry will affect them through the growth of gas tariffs. This was reported by Kommersant, citing sources familiar with the discussion.
In total, the Russian government expects to collect an additional 1.4 trillion rubles in revenues to the budget. It is proposed to increase revenues by increasing taxation of export industries: oil and gas, coal, as well as thanks to fertilizer and chemical industries. The key point of the plan is an increase in the export duty on pipeline gas to 50%, as well as the introduction of its analogue for the export of liquefied natural gas (LNG).
In the case of the export duty on gas, the authorities are considering introducing a differentiated rate: 50% if the gas price exceeds $300 per thousand cubic meters, and 30% if it is lower. Currently, Gazprom sells gas to Europe at a price of about $2.8 per thousand cubic meters. With the help of the new mechanism, the authorities intend to receive an additional 578 billion rubles in 2023, and a total of 1.23 trillion rubles in 2023-2025.
Ordinary Russians will be affected if the government approves an increase in the mineral extraction tax (MET) on gas for all producers. These payments will actually be transferred to the end consumer, the newspaper notes: for example, tariffs for domestic gas consumers will increase in 2023 by 8.5% at once, and by 7% in 2024. The growth of the MET will bring an additional 28 billion rubles to the budget in 2023, already 100 billion rubles in 2023, and 150 billion by 2025.
For the first time, the authorities are considering taking revenues from LNG producers who have enjoyed benefits for a long time. True, the difficulties with the introduction of new taxes rest on the current legislation and the conditions on which foreign partners of LNG projects, including Chinese companies, entered. They suggest that the authorities do not have the right to unilaterally worsen the tax regime for LNG projects. However, experts see a way out in improving the conditions for foreign investors by increasing their share in exchange for higher taxes.
The tax changes will also not bypass the oil industry. The government proposes to revise the export duty by increasing the coefficient in the duty formula from 0.167 to 0.25, which will increase tax revenues by 240 billion rubles. Additionally, it is proposed to extend the corrected damper for gasoline, which came into operation only in September, for 2023-2025, which will increase tax revenues by another 190 billion rubles a year.
The reduction in budget revenues appears to be higher than the government expected. Earlier it became known that it is proposed to impose similar measures on the coal industry, fertilizer producers and the chemical industry. Moreover, the country's coal industry has come under enormous pressure due to sanctions and is already on the verge of bankruptcy, as the coal miners themselves warned the government about.
At the same time, the withdrawal of excess profits from energy companies is not unique to Russia: in Europe, which is suffering from the energy crisis due to Russia’s actions, similar measures have already been approved at the level of the European Commission, which should replenish the treasury by about €140 billion. to help businesses affected by the energy crisis and ordinary citizens. Whether the Russian authorities will carry out similar support measures is still unknown.
