Russia sets new MET tax for metals firms, drops idea of new profit tax

Shelekhov aluminium factory. Credit: Wikimedia Commons

Russia has agreed on a new formula of mineral extraction tax (MET) with Russian producers of steel, iron ore, coking coal, fertilisers and mixed ores, such as mined by Nornickel, but dropped idea of a new profit tax, officials said.

Russia has dropped the idea of setting a formula-based profit tax linked to previous dividends and investments for now, Interfax news agency reported on Thursday, citing Alexander Shokhin, head of the Russian Union of Industrialists and Entrepreneurs.

The concept will be revised and will not be introduced at least until 2023, Interfax quoted Shokhin as saying. This idea was criticised by Shokhin earlier this week as potentially damaging for investment climate.

The finance ministry said earlier this week that the metals companies will provide 160 billion roubles ($2.2 billion) in additional proceeds to the 2022 state budget via the new MET. Annual proceeds of similar size are expected from them in 2023 and 2024.

“We have agreed taxation parameters with business on fertilisers, coking coal and multi-component ores,” Finance Minister Anton Siluanov told a government meeting on Thursday.

The new MET tax will be set for iron ore at 4.8% starting from 2022, Interfax quoted Shokhin as saying. The new excise tax on semi-finished steel product will be set at 2.7%, he said.

($1 = 72.7810 roubles)

(By Vladimir Soldatkin and Polina Devitt; Editing by Alison Williams and Matthew Lewis)

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