Metallurgists and chemists want to raise taxes

Metallurgists and chemists want to raise taxes

Metallurgists and chemists want to raise taxes

Investing.com – The stability of the tax system in Russia remains an unattainable dream, despite President Vladimir Putin's pledge not to change the rules of the game until 2024 in his Federal Assembly Address.

The Ministry of Finance, which during the crisis began to look for additional sources of financing the resulting budget deficit, is not inclined to put its hand into the wide pocket of the NWF or turn on the printing press, as the Fed and the ECB are doing to support the economy. His job is to ensure that the budget is filled and, since the aforementioned tools are used to a minimum, the finance department, as before, turns its gaze on those from whom it is still possible to take something.

This time we are talking about getting up to 90 billion rubles. per year from metallurgists and chemists.

On Tuesday, according to Kommersant, the government's draft law commission discussed the agency's proposal to raise the tax on the extraction of certain fertilizers and non-ferrous metal ores by 3.5 times.

Specifically, it is proposed from January 1, 2021 to apply a “rental coefficient” of 3.5 to the MET rate for potash salts (now 3.8% of the sales value) and apatite-nepheline, apatite and phosphorite ores (4%), natural salts and pure sodium chloride, nepheline, bauxite, as well as non-metallic mining raw materials, conditioned non-ferrous metal ores (excluding nepheline and bauxite, the current rate is 6%) and iron ore (4.8%).

According to the publication, Norilsk Nickel (MCX: GMKN), Rusal (MCX: RUAL), NLMK (MCX: NLMK), Phosagro (MCX: PHOR) and Eurochem may suffer the most from the increase in fees, since this will affect all types of solid minerals for excluding coal, diamonds, gold, peat and common raw materials.

“Everyone is shocked and on their ears: in fact, this is just a 3.5-fold increase in the mineral extraction tax for no reason. One hand is preparing bills on the protection of investment, and the other is suddenly raising the mineral extraction tax. influence the covenants on loans “, – quotes” Kommersant “the reaction of one of the employees of a large industrial company.

Experts warn that this measure could lead to a decrease in production, as the increase in taxes on raw materials leads to higher prices for products and a decrease in consumption.

In addition, the unpredictability and instability of the rules of the game in subsoil use will alienate investors and, as market participants believe, “put an end to the implementation of investment programs for the modernization and construction of new capacities in the mining sector”.

Objections to the initiative of the Ministry of Finance in the Ministry of Industry and Trade were addressed by the association “Russian Steel”, which in its letter points out the risks of job cuts and investment risks.

At the same time, some analysts do not see a disaster in a possible tax increase, since the share of MET in the revenues of mining companies today is less than 5% (for example, in the oil industry it is more than 50%). As for fertilizer producers, according to Andrey Lobazov from Aton, the prime cost of Russian fertilizer producers is one of the lowest in the world. However, he notes that the industry is now going through difficult times and the pricing environment is not entirely favorable.

The text was prepared by Alexandra Shnitnikova

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