Necessary changes in the procedure for calculating the MET - Taxes and taxation

Necessary changes in the procedure for calculating the severance tax

Serious shortcomings in terms of effective impact on the economy of the state, as well as on the economy and financial position of taxpayers, have a tax on the extraction of minerals. It is no accident that almost every year the system of taxation of subsoil use introduces amendments that are of fundamental nature.

Introduced in January 2002, this tax does not take due account of the specifics of mining, geological, economic, geographical and infrastructural conditions of field development. The structure of reserves, quality and many other conditions and factors of extraction of natural resources are also not taken into account. The same taxation gives additional advantages to taxpayers with the best subsoil plots, which makes it profitable to extract minerals from relatively easily recoverable reserves. With regard to low-profitable deposits, the established tax rates are overstated and do not stimulate the extraction of minerals from these deposits, which leads to their withdrawal from operation, a reduction in production and a reduction in the revenues of taxes to the budget. As a result, the number of sections of fields and wells potentially potentially usable but increasing in inactivity is increasing. Particularly clear are the shortcomings of this tax when levying oil and gas.

The adjustments to the tax rate on the coefficient characterizing the degree of depletion of reserves, as well as the establishment of a zero tax rate for newly developed subsoil plots, introduced since 2007, are certainly a serious step to improve the taxation of subsoil use. But they do not solve all the accumulated problems, as they do not provide differentiation of taxation depending on geological, geographic, transport and other features. In addition, these amendments are aimed at stimulating the development of developed and newly developed areas exclusively for oil, without affecting all other minerals, including natural and associated gas.

Tax rates for virtually all minerals, except oil and natural gas, have another serious drawback. Tied to the value of mined minerals, they create an opportunity for mining companies, using understated transfer prices, to reduce their tax obligations.

The current tax on the extraction of minerals is not satisfied neither by most taxpayers, nor by the state. And most importantly, there is as yet no clear concept of tax reform in extractive industries.

On the need to introduce differentiation in the taxation of mining companies depending on the geological and geological conditions, the degree of exhaustion of deposits and other factors have been spoken for many years. But how to realize this differentiation, on what principles - there is no clarity yet.

Thus, the issues of building an economically sound, fair and efficient tax system in the extractive industries of the United States economy are postponed at best for a year, and given the complexity of their solution - for several years. And this, naturally, inevitably drags out the completion of the overall tax reform in the country.

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