Russian finance ministry seeks to hike oil and gas taxes
A new Russian draft budget will aim to draw in more funds from oil and gas producers while commodity prices are high, Finance Minister Anton Siluanov said, as part of efforts by the government to tackle its budget deficit.
The Kommersant daily said on Tuesday, citing sources familiar with the discussions, that Russia was considering increasing taxes on the oil and gas sector by 3 trillion roubles ($50 billion) in 2023-2025.
The government said on Thursday it had approved a bill covering budgets for 2023 and for the period 2024-2025, without citing any parameters. The bill goes to parliament for debate and then needs to be signed off by the president.
Siluanov told a televised government meeting the main proposals for the new budget were an increase in export duty for pipeline gas exports, taxes on liquefied natural gas, and the introduction of export duty for fertilisers and coal.
The finance ministry also wants to increase the taxation of the oil industry by keeping the so-called damping fuel tax mechanism and changes to a mineral extraction tax for crude oil, Siluanov said.
The government expects the budget deficit to amount to 2% of gross domestic product (GDP) next year, falling to 0.7% by 2025.
RIA news agency said the finance ministry expected this year’s budget deficit to come in at 0.9% of GDP, or 1.3 trillion roubles ($22 billion).
Olga Belenkaya of the Finam brokerage said the planned increase in the deficit would be taken into account by the central bank when deciding on monetary policy.
“Even the budget parameters that are being discussed could be exposed to a worsening geopolitical background,” she said, citing a mobilisation in Russia to bolster its forces fighting in what it calls a “special military operation” in Ukraine as well as referendums on joining Russia being held in Russian-controlled territories in Ukraine.
Siluanov said the government planned to focus on domestic borrowing to plug the budget gap.
According to a document seen by RIA news agency, the ministry plans to borrow 1.7 trillion roubles ($28.7 billion) in 2023, 1.9 trillion roubles in 2024 and 2 trillion roubles in 2025.