From Bloomberg:

Vladimir Putin’s government is considering shifting the burden of oil taxes from the point of export to the point of extraction, a move that would eliminate the benefit of duty-free supplies enjoyed by neighboring Belarus and Kazakhstan, according to two officials familiar with the matter.

The nation’s Finance Ministry is assessing a plan to reduce to zero Russia’s oil-export duty from 2018, while increasing the tax on crude extraction, said two government officials, who asked not to be identified because the discussions are private. The move will bring additional budget revenue, one of the people said. While the proposal is not intended to raise the overall tax burden on oil supplies, it would increase the price paid by members of the Eurasian Economic Union, especially Belarus, another official said.

Russia’s shipments of duty-free oil to its EEU partners have been the subject of numerous disputes because the state loses revenue when some of the supplies are re-exported, one of the officials said. The tax change is set to be discussed by the government in August to October, he said.

The Finance Ministry’s press service declined to comment Thursday.

The world’s top energy exporter is enduring the longest economic downturn of Putin’s 16-year rule. It relies on crude oil export duties and extraction taxes for about 23 percent of its budget. The government is running the widest deficit since 2010 after a slump in oil prices and is looking for options to cover the gap, including selling state assets, cutting spending and discussing a tax overhaul.

Continue reading here.

Legal Notice