Economy Ministry Opposes Increasing Taxes for Mining, Chemical Companies: Source

Russia’s Economic Development Ministry does not support Russian presidential aide Andrey Belousov’s proposal to increase taxes on the mining and chemical sectors, a ministry source said on Thursday, according to Kommersant.

“The Economic Development Ministry does not support Belousov’s initiative,” a source told TASS news agency.

In a letter to President Vladimir Putin, Belousov proposed last week that the head of state orders an increase in budget revenues from mining and chemical companies’ excess profits because they pay lower taxes than oil and gas companies. According to the aide, the idea would bring an additional 513.7 billion rubles ($7.7 billion) into the state budget. 

The list of affected companies includes NLMK, Severstal, Magnitogorsk Iron and Steel Works, Mechel, Metalloinvest, Evraz, Norilsk Nickel, Alrosa, Polyus, Sibur, Uralkali, Phosagro, and others.

According to the estimates of the Russian Union of Industrialists and Entrepreneurs, the capitalization of the Russian stock market as a result of these measures may fall by 3 trillion rubles ($45 billion). The organization also warned that Belousov’s initiative would negatively affect the country’s attractiveness to foreign investors.

The implementation of the initiative on taking out additional revenues from metal and chemical companies in Russia may affect their profitability, Fitch rating agency said earlier this week.