Russian Ministry of Energy struggles with the Ministry of Finance for benefits for oil companies

A draft law on new tax for oil companies on added income (AIT) must be prepared by the Ministry of Energy and Ministry of Finance by the fourth quarter. They would have to work out a common position by May - the term is set in the order of the Presidential Commission on the fuel and energy sector. But they couldn’t agree - the Ministries still have radical differences: the main dispute is whether to transfer deposits, which currently have benefits, to the new system and whether to save them.

AIT is to replace the duty and partially MET. The tax burden will depend not on production, but on income.

The Finance Ministry wants to transfer pilot fields in Western Siberia and all new fields in Eastern Siberia to AIT, canceling severance privilege and duties for the latter. The Energy Ministry criticized the bill, prepared by the Ministry of Finance: the rate was very high, and the conditions for the preferential deposits would deteriorate. Then the Ministry of Finance proposed to lower the rate so that the load wouldn’t increase, two officials involved in the discussion of the project report.