Russia may abolish export duty on gold

gold stone on gold bar, Russian gold nugget, on gold background. Financial investment or luxury concept.

Russia is considering abolishing export duties on gold, the director of the finance ministry’s tax policy department said on Tuesday, as the country seeks to boost revenues by reviving shipments.

Russia in 2022 was ranked as the world’s second biggest gold miner with a share of about 9% of global production, after China and before Australia, according to the World Gold Council. Russian gold exports are not published.

Most Russian gold miners, including Russia’s largest producer Polyus, are under Western sanctions imposed in response to Moscow’s actions in Ukraine.

Last June, Britain, Canada, Japan and the United States banned new imports of Russian gold.

Russian exports to the West had already slowed as Russian gold trade, according to industry players and data, was rerouted to countries that had not imposed sanctions on Moscow, such as China, Turkey and the United Arab Emirates.

Russian gold exports have stopped since the start of this year after new exchange-rate-linked duties, Danil Volkov, director of the finance ministry’s tax policy department, told the Federation Council, the upper chamber of parliament.

This could be because banks introduced discounts in order to sell the metal to the public, Russian Deputy Finance Minister Alexei Sazanov said in early April.

Russia’s lower house of parliament last week passed a bill to increase the mineral extraction tax on gold between June and December this year to try to compensate for budget losses due to falling export revenues.

Sazanov said that this would contribute 15 billion roubles ($159.69 million) to the budget by the end of the year.

When asked about the possible abolition of export duties on gold as the mineral extraction tax was being increased, Volkov said: “This issue is being considered at the moment.”

Last year, Russia imposed exchange-rate-linked duties on a broad group of products, including gold, to raise revenue at a time of increased military spending and as producers increased exports because of the weakness of the rouble.

The duties, imposed from last October until the end of 2024, range from 4% to 7%, reaching its maximum if the rouble is weaker than 95 per dollar. On Tuesday, it was trading at 94.18.

According to the Federal Customs Service, in 2021 Russia exported more than 302 tonnes of gold worth $17.4 billion, and production was 346 tonnes, Russian agencies reported.

($1 = 93.9340 roubles)

(By Anastasia Lyrchikova and Darya Korsunskaya; Editing by Barbara Lewis)


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