The Russian Finance Ministry does not expect a significant deterioration in the financial position of metals and chemicals producers from the upcoming increase in the mineral extraction tax (MET), while the fairness of the tax burden will increase, and the funds raised this way will help to fulfill the state's social obligations, the ministry said
MOSCOW (Pakistan Point News / Sputnik - 17th September, 2020) The Russian Finance Ministry does not expect a significant deterioration in the financial position of metals and chemicals producers from the upcoming increase in the mineral extraction tax (MET), while the fairness of the tax burden will increase, and the funds raised this way will help to fulfill the state's social obligations, the ministry said.
The prepared bill increases the tax rate for potash salts, as well as minerals containing components with high added value (nickel, titanium, platinum group metals) by 250 percent. It is assumed that this measure will take effect from the beginning of next year and will provide budgetary additional 56 billion rubles next year.
"We have assessed the impact of such proposals on the financial position of companies. The decrease in the net profit margin will generally be no more than 2 percent. Considering that the majority of mining companies have a net profit margin of more than 20 percent, and in some cases even 50 percent, there will be no significant deterioration in their financial situation," Finance Minister Anton Siluanov said, commenting on the results of a meeting with companies that took place on Thursday.
It is also noted that such adjustments will increase the fairness of the tax burden on companies.
"At the meeting, it was discussed that the companies will also take part in solving national goals this way. Additional funds from the introduction of the coefficient will also be used to fulfill the social obligations of the state during the spread of coronavirus and a sharp decline in oil prices," the ministry said.
It is noted that the bill has already been approved by the government and is being prepared for submission to the State Duma.
"The document is budget-forming: the increase in the tax rate has been taken into account in the macro forecast and the draft budget for the upcoming three-year period and will not entail macroeconomic changes," the ministry underlined.
