Russia will retain tax breaks in
2011 for producers developing new oil and gas deposits that
require large capital outlays, though an extraction tax increase
will go ahead, Prime Minister Vladimir Putin said.
Tax increases are necessary for the government to meet its
spending plans, including a 9 percent rise in pensions next
year, Putin said during a government meeting in Moscow today.
While the government must have sufficient funds, “we don’t
have the right to get excessively carried away with borrowing,”
Putin said. “We also don’t think it wise to raise taxes across
the board.”
Russia may boost oil and gas extraction levies and tax
copper and nickel exports to narrow the budget gap. The Finance
Ministry proposed a 61 percent increase in the gas extraction
tax next year, a 6 percent increase in 2012 and a 5.4 percent in
2013. The oil extraction tax may rise to 6.5 percent in 2012 and
5.4 percent in 2013, according to the proposal. The tax changes
must still be formally approved by the government.
Putin reiterated his estimate of a budget shortfall this
year of less than 5 percent of gross domestic product, down from
5.9 percent in 2009, as the world’s biggest energy exporter
recovers from last year’s record 7.9 percent contraction.
Borrowing Plans
The shortfall is set to narrow to 3.6 percent of GDP next
year, 2.4 percent in 2012 and 1.5 percent in 2013, Deputy
Finance Minister Sergei Storchak said last month.
Russia plans to borrow 1.5 trillion rubles next year, 1.3
trillion rubles in 2012 and 931 billion rubles in 2013, Storchak
said, citing preliminary estimates in the government’s borrowing
program. The country will meet 90 percent of its borrowing needs
on the domestic market, he said.
The Economy Ministry is set to raise this year’s economic
growth forecast from the current 4 percent, Deputy Economy
Minister Andrei Klepach said yesterday. The economy expanded an
annual 5.4 percent in the three months through June, Klepach
said. That compares with 2.9 percent growth in the first
quarter, according to the Federal Statistics Service.
To contact the reporter on this story:
Maria Levitov in Moscow at
mlevitov@bloomberg.net
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