Experts predicted increased inflation due to increased taxes on metallurgists
Russian metallurgists and fertilizer producers may face a decrease in the profitability of their projects due to the authorities’ planned increase in mineral extraction taxes (MET). This is reported by “Kommersant” with reference to representatives of these economic sectors and experts.
For example, the metallurgical industry complained that the government did not discuss these tax changes with business, and the approaches of the Ministry of Finance are selective. Metallurgists are worried that the cost of paying the mineral extraction tax will be burdensome for a number of companies that operate under sanctions and depend on global conditions.
On the other hand, the chief strategist of the investment company Vector X, Maxim Khudalov, predicted that for the leaders of the metallurgical industry, the increase in the mineral extraction tax will result in a slight increase in costs. However, it will be partially compensated by the abolition of export duties.
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But for poor deposits, taxes will be sensitive. This may lead to an increase in the cost of production of rolled steel, which means there is a risk of increased inflation.
In turn, Ilya Kolomeets, director of business development and consulting practice at Metals & Mining Intelligence (MMI), suggested that mining companies will not change their plans due to the planned increase in taxes. Moreover, the abolition of export duties on ore and pellets may have a positive impact on export supplies of raw materials.
The chemical industry expects painful, but not critical, consequences from increasing the mineral extraction tax. For example, you will have to pay $13-14 per ton of ammonia, which is less than 3 percent of its price.
On the other hand, chemical projects have a very long payback period, which means a special burden awaits companies that have just implemented a new project.
It was previously reported that in Russia the tax pressure on the oil industry is almost three times higher than that experienced by metallurgists. Over nine years, public metallurgical (as well as mining) companies paid about three trillion rubles in taxes to the budget. Taxes for oil companies remain the highest in the raw materials sector. Over the past 10 years, oil companies have contributed 67 trillion rubles in taxes, and gas companies – 22 trillion rubles.
In addition, it is known that Russian producers of rare and rare earth metals have already asked for increased government support for the extraction and primary processing of these products. They also advocate increasing duties on the import of imported raw materials in order to weaken competition from foreign manufacturers.
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