Russia expects new tax on ferrous metals to add $1.8 billion to budget

Photo by Magnitogorsk Iron and Steel Works.

Russian officials expect new taxes on producers of steel, coal and iron ore to add an additional 130 billion roubles ($1.8 billion) to the state budget in 2022, four sources familiar with the ongoing discussions told Reuters.

Moscow is considering imposing a mineral extraction tax (MET) linked to global prices on producers of ferrous metals and fertilisers, as well as on ore mined by Nornickel, sources said last week.

The new tax is expected to raise an additional 10 billion roubles from fertiliser producers, three of the sources said. For Nornickel, the new tax will cost an extra 20-25 billion roubles, one of the sources added.

Details of the proposed changes to the tax system will be finalised closer to the second reading in the Duma, the lower house of parliament, a government source said.

The issue will be discussed at a meeting of officials with President Vladimir Putin on Monday and then at the government level on Tuesday, the source added.

The government, the finance ministry, Nornickel and the main fertiliser producers declined to comment.

The main producers of steel also declined to comment, but Severstal said that “constructive conversation continues, positions are being reconciled and mutually acceptable solutions worked out”.

The expected additional proceeds from the ferrous metals and fertiliser industries were first reported by the Vedomosti newspaper citing unnamed sources on Monday.

($1 = 73.0520 roubles)

(By Darya Korsunskaya, Polina Devitt, Gleb Stolyarov and Anastasia Lyrchikova; Editing by Jason Neely)

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