Russian Prime Minister Vladimir Putin said export taxes on copper and nickel should be linked to global prices and called for a quick decision to raise revenue.
Putin urged OAO GMK Norilsk Nickel’s billionaire shareholders Oleg Deripaska and Vladimir Potanin to speed up work with company management and government officials to find a flexible tax formula to reflect changes in world prices, like the country’s duty on oil shipments.
“If this formula isn’t ready in the near future, if it isn’t worked out, then I will have to agree with those of my colleagues who make their own proposals, which the company’s shareholders may not like,” Putin said today in the Arctic city of Norilsk.
The government, which had its first budget deficit in a decade last year, aims to narrow an expected gap of 5.4 percent of gross domestic product this year to 3.6 percent next year, through tax increases and assets sales.
Russia reinstated a 5 percent tax on nickel in January after halting it for 11 months to aid producers including Norilsk Nickel. Copper exports aren’t taxed now. The duty on crude shipments is based on an average international price during a month-long period.
Norilsk Nickel has been lobbying for the idea of a tax that moves with global prices, Vladimir Zhukov, a metals analyst at Nomura International Inc. in Moscow, said today by phone.
“Putin voiced what the company has been saying,” Zhukov said. “Putin’s proposal is a part of the government’s plan to raise taxes on natural resources. ‘‘The government is looking for ways to deal with the state budget deficit for the next two or three years.”
The Finance Ministry proposed taxing nickel exports at a rate from 5 percent to 7.5 percent when the metal costs from $12,000 to $20,000 a metric ton and cutting the tax to zero when it trades below $12,000 a ton, Ilya Trunin, the ministry’s head of tax and customs, said on July 21. The duty will rise to 30 percent of the difference between the market price and $20,000 a ton when nickel trades above that level.
First Deputy Prime Minister Viktor Zubkov ordered the government last week to speed up a tax decision, the Interfax news service reported. The customs tariff commission will discuss the metals duties at its next meeting at the end of September, Interfax said, citing an unidentified commission official.
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