Putin promises tax holidays for Russian oil producing companies

Putin promises tax holidays for Russian oil producing companies

14.05.2008, 19.42

UST-LUGA, May 14 (Itar-Tass) -- Prime Minister Vladimir Putin has urged the government to formulate a number of tax preferences for Russian oil producing companies.

“First of all, the mining tax will be reduced. The draft has been prepared and considered. It has not be submitted to the Duma,” Putin said on Wednesday.

“We also need to offer tax holidays for the companies that prospects or and develop new fields,” he added.

In his opinion, seven-year tax holidays are “fine”.

“In addition to Far Eastern territories, this benefit will also apply to fields in the Timano-Pechora basin, Yamal Peninsula, and the continental shelf,” Putin said.

Among the measures that should create tax preferences, Putin named new rates and duties for petrol products. “We should introduce a new system of duties and rates for petrol products. For example, the higher the quality of petrol products, the lower the excise will be for them,” he explained.

“It is also necessary to improve field depreciation procedures,” he added.

Deputy Prime Minister Sergei Ivanov, Energy Minister Sergei Shmatko, Minister of Natural Resources Yuri Trutnev, and the heads of major mining companies attended the meeting with the president at Ust Luga.

He visited the Ust Luga port in 2002 last time.

This commercial port is located on the border between Russia and the European Union and it plays an important role in transit transportations in the format of the European Transport Infrastructure.

Ust Luga can operate all round the year and handle all types of cargoes.

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Govt makes decision to lower production tax on crude oil

15.05.2008, 16.25

MOSCOW, May 15 (Itar-Tass) -- The Russian government has made a decision in principle to reduce the mineral resources production tax on crude oil, Economic Development and Trade Minister Elvira Nabiullina told a news briefing on Thursday.

“The risk of stagnation in the oil industry is great and we shall do our utmost to prevent it,” he said. “Stagnating production is an alarming sign for us. There must be change and specific decisions regarding taxes. They are being coordinated and the Finance Ministry will present them soon.”

Nabiullina recalled that the oil industry was the backbone of the Russian economy and a major source of budget revenues.