Russia unveils tax breaks for O&G industries

Finance Ministry
has released a draft document outlining a series of tax
break proposals for oil and gas industries as part of its fiscal policy strategy
for 2009-2011.

The draft document, to be reviewed by the Russian government on April 3,
includes proposals to cut the mineral extraction tax, change excise duties on
high quality oil products and introduce tax breaks for exploration on the
continental shelf, The Guardian reports.

Alexei Kudrin, the Russian Finance Minister, whose ministry is in charge of
tax policy, signalled last week he would propose a cut to the mineral extraction
tax by lifting the non-taxable threshold to $US15 (?7.5) a barrel from the
current $US9.

The increase will result in a much sought after break in the heavily taxed
$US4.20bn-a-year industry, which accounts for about 0.25% of Russia’s projected
2009 gross domestic product.

Further reading:

Kremlin investigates BP’s tax affairs

story in The Guardian

Related reading