CC BY
2
UDC 336.226.46
Ammaev M. K. master student
1 course, faculty of "informatics and information technology"
Technologies Dagestan State University Makhachkala, Russian Federation
TAXATION OF MINERALS IN THE RUSSIAN FEDERATION
Abstract: the article reveals the essence of the tax to the extraction of minerals. The dynamics of the mineral extraction tax revenues to the federal budget of the Russian Federation, as well as to the budget of the Republic of Dagestan is considered. The advantages and disadvantages of MET are determined. Positive and negative aspects of the introduction of the tax on additional income are considered. Also, ways of improving the existing mechanism of taxation of minerals in the Russian Federation are proposed.
Keywords: tax on mining, oil and gas revenues, minerals, tax on additional income, tax and non-tax revenues.
Oil is known to be the main wealth of Russia. Formally, the share of oil and gas revenues in the budget is almost 50%; in reality, this value is much higher, since hydrocarbons, together with other raw materials, provide the lion's share of citizens' consumption, and hence tax revenues from companies that work for domestic demand. Today, the majority of oil revenues come to the budget through export duties (EP) and mineral extraction tax (MET).
The mineral extraction tax was introduced into the system of taxes and fees from January 1, 20021. With its introduction, three different compulsory payments paid for subsoil use were abolished: payments for subsoil use (mining), deductions for the reproduction of the mineral resource base and excise tax on excisable minerals (oil, stable gas condensate, except for natural gas; from January 1, 2004, the excise tax on natural gas was also abolished).
The replacement of the three considered payments with the mineral extraction tax was due to:
1) the need for a comprehensive elimination of deficiencies in the legal regulation of these payments, which could not be eliminated without a fundamental revision of the system of taxation of subsurface resources;
2) lack of effective implementation of the functions of payments2.
MET is charged in all countries, and there are 3 ways of calculating tax:
- from the cost of a unit (volume, mass) of the extracted mineral;
- from the cost of production of the mining and processing enterprise;
1 Federal Law No. 126-FZ of August 08, 2001 (as amended on December 27, 2009) "On Amendments and Additions to Part Two of the Tax Code of the Russian Federation and Certain Other Acts of the Legislation of the Russian Federation, and on the Repeal of Certain Legislative Acts Of the Russian Federation "// http://www.consultant.ru (Date of circulation 20.05.2018);
2 Melnikova Yu.V. Improvement and development of taxation of mining of Russian minerals // Financial analytics: problems and solutions. 2010. № 9. C 77-82.
- with the profit obtained by the mining and processing enterprise3.
In Russia, it was established that the mineral extraction tax is determined as a percentage of the value of the extracted mineral, taking into account its type.
Mineral extraction tax retains mainly fiscal value and contains a small number of regulatory instruments. That is why, in the long term, measures are needed to ensure an economically justified tax burden in the extraction of all kinds of minerals. In addition, it requires the use of significantly more complex in terms of tax administration tools for taxation of resources, based either on taxation of income or on expanding the use of substantial geological and geographic and economic factors in the construction of tax4.
In addition to the fiscal function, the mineral extraction tax also has a regulatory function. Despite the fact that Russia has unique natural resources, it must be remembered that most of them are not renewable. This tax acts as a regulator of their rational use, as well as legal relations between legal entities, individual entrepreneurs owning the subsoil, and the state.
In the income structure of the federal budget of the Russian Federation for 2018, oil and gas revenues account for 36%. The dependence of the federal budget on oil and gas revenues is gradually decreasing. This is due to the crisis of 2014 in Russia, when oil prices from more than $ 100 per barrel fell to $ 50 per barrel. However, the share of revenues from the collection of the mineral extraction tax in the revenues of the federal budget of the Russian Federation is significant (table 1).
Table 1
The dynamics of the revenues of the mineral extraction tax for 2017_2020, Bln. rub. 5_
Name of the indicator 2017 2018 2019 2020
Earnings total 14720,3 15257,8 15554,6 16258,4
including:
Oil and gas revenues 5195,2 5480,1 5248,5 5440,4
of them:
MET 3879,8 3547,5 3410,3 3533,3
As can be seen from the table, the share of MET in the federal budget revenues in 2017 was 26%, and in 2018 23%, in 2019 and 2020 22% and 21%, respectively.
In the budget revenues of the republic of Dagestan, the mineral extraction tax takes up a small part. Thus, in accordance with the adopted Law of the Republic of Dagestan of December 20, 2017 No. 100 "On the republican budget of the Republic of Dagestan for 2018 and for the planning period of 2019 and 2020", the following amounts of income of this tax are provided (table 2).
3 Podych Yu.V. Efficiency of the legal regulation of levying a tax on the extraction of minerals // Tax bulletin. -2012. - №2. - P. 37-41;
4 Yumaev MM Taxation of the main types of mineral raw materials: problems and directions of improvement // Official materials for the accountant. Comments and consultations. 2009. № 12;
5 The Federal Law "On the Federal Budget for 2018 and the Planning Period of 2019 and 2020" of 05.12.2017 N 362-FZ (last version) // http://www.consultant.ru (Date of circulation 05/20/2018);
Table 2
Dynamics of revenues to the budget of the Republic of Dagestan NDPI
for 2018-2020, mln rubles.6
Name of the indicator 2018 2019 2020
Earnings total 100540,5 91314,3 97971,0
including:
Tax and non-tax revenues 25241,3 26692,1 27938,3
of them:
MET 20,7 21,6 22,5
As can be seen from the table, during this period, an increase in revenues of both the mineral extraction tax to the republican budget and tax and non-tax revenues of the republic of Dagestan is expected. The share of MET in tax and non-tax revenues of the budget of the Republic of Dagestan is only 0.0008%.
Mineral Extraction Tax has both advantages and disadvantages. The main advantages of the MET are the simplicity of its administration and the increase in the collection of payments to the budget compared to the three previous taxes. The disadvantages include the fact that the introduction of a solid mineral extraction tax rate made it difficult for a number of oil companies to solve the problem of expanding the introduction of new technologies to ensure the completeness of oil reserves. For low-margin deposits, the tax turned out to be higher than previous payments, which led to the closure of some deposits. At the same time, as practice has shown, the fixed rate of mineral extraction tax introduced for January 1, 2002, turned out to be higher than previous payments, which led to unreasonable losses and the cessation of the development of low-quality mineral reserves. For highly profitable objects, the MET rate turned out to be lower than previous payments, which led to the super-profits of individual companies, on the one hand, and at the same time a decrease in the revenue part of the state budget, on the other hand7.
Also, speaking of the pros, Russian oil companies did not feel the crisis, largely due to the current tax system in the Russian Federation. Thus, the Russian oil companies free cash flow (operating cash flow minus capital investments and dividends) increased in 2017 compared with 2013 (in rubles), although they only increased capital costs. For example, the free cash flow of Rosneft from 2013 to 2017 increased from 126 billion to 215 billion rubles. (minus the payment of interest on prepayments), and for LUKOIL - from 32 billion to 170 billion rubles (given that in 2017 LUKOIL sold the diamond business for $ 1.45 billion). Only at Gazprom Neft, this figure fell slightly - from 68 billion to 65 billion rubles - due to the peak of investment, he explains. During this time, Rosneft's capital expenditures increased 1.6 times, to 890 billion rubles, Gazprom Neft - 1.6 times, to 340 billion rubles, LUKOIL - by 5%, to 500 billion rubles.
6 Law of the Republic of Dagestan of December 20, 2017 No. 100 "On the Republican Budget of the Republic of Dagestan for 2018 and for the Planning Period of 2019 and 2020" // http://www.consultant.ru. (Date of circulation on 05/20/2018);
7 Arkhipov DV. Taxation of enterprises under subsoil use // Bulletin of TSPU. 2007. № 9 (72). C. 6;
Oilmen have been helped by the devaluation of the ruble and the Russian tax system, which is designed so that when oil prices fall, the state receives less taxes, and with growth it increases, oil prices fluctuations are not so sensitive. The ruble price of oil decreased by 13% compared to 2013, to 3,000 rubles per barrel of Urals, and taxes (export duty and mineral extraction tax) fell by 41% to 1,441 rubles per barrel8.
Although the Russian tax system has mitigated the impact of falling oil prices, it is still far from ideal. In our opinion, the state needs to impose a tax on additional income (VAT, will be charged on income from the sale, but not on revenue), which will allow to develop old fields, otherwise we will face a decline in production. The bill on the NDD at the end of last year, the government submitted to the Duma, it must earn from January 1, 2019.
Earlier, two bills were submitted to the State Duma, which provided for the introduction of an additional income tax (NDD) from activities related to the extraction of hydrocarbons:
- Draft Federal Law No. 98057470-2 "On the tax on additional income from hydrocarbon production" of 1997;
- Draft Federal Law No. 342373-3 "On Amendments and Amendments to Part Two of the Tax Code of the Russian Federation, as well as on Amendments to Other Legislative Acts of the Russian Federation" dated 2003. The essence of the draft Federal Law No. 342373-3 was to tax revenues from hydrocarbon production after reimbursing the taxpayer for all capital, transport and operating costs incurred by the field to extract oil and gas rent for each specific subsurface license area9.
Today, oil companies pay MET and export duties, and these taxes are levied on revenue. The reform implies a partial replacement of MET with a new tax - on value added. The rate of NDD will be 50%, it will be charged from the income from the sale of oil minus export duty, reduced MET, costs of production and transportation. The transition to this system is voluntary.
For objective reasons, oil production in Western Siberia is falling, and the cost of extraction is growing, which requires new incentives to support investment in production, said Energy Minister Alexander Novak. According to the minister, from 2010 to 2016, production in Western Siberia (excluding the Yamalo-Nenets administrative district, which is subject to significant mineral extraction tax reductions) decreased from approximately 307.5 million to 285.5 million tons per year. In order to preserve the level of oil production, it is required to intensify drilling and use more advanced technologies to increase oil recovery, the minister concluded10.
"According to the results of the analysis of the key pilot group of operating
8 Fadeyeva A. Oil workers earned on falling oil prices. URL: https://www.rbc.ru/business/ 12/02/2018/5a7db5f19a7947957ee43412 (Date of circulation 05/20/2018);
9 Anishchenko VA The Influence of New Rules of Transfer Pricing on the Possibility of Introducing a Tax on Additional Incomes // Journal of Russian Entrepreneurship. 2014. No. 9 (255);
10 L. Nowak estimated the surplus at 1 trillion. rub. receipts from the tax reform of oil. URL: https://www.rbc.ru/business/21/11/2017/5a145a649a7947625cee2202 (Date of circulation 05/20/2018).
fields in Western Siberia, the transition to the NDD of these areas of subsurface resources will make it possible to carry out more than 0.5 trillion rubles in 20192035. rubles additional investments and increase oil production by more than 100 million tons relative to the current production profile, "said Alexander Novak. At the same time, budget revenues from these areas will increase by almost 1 trillion. rubles for the entire period or an average of 50-60 billion rubles a year for 18 years, he added. And falling budget revenues from the introduction of a tax on added income, according to Novak, will be insignificant: 2-3 billion rubles each in the first two years with their full compensation already in the fourth year of the reform.
The negative consequences of introducing a tax on additional income include the fact that the value that is subtracted from the total amount can be reduced, the tax burden can be reduced if lawyers and corporate economists find a way to reflect smaller amounts of profit. However, competent people also work in the tax authorities, there will be a punishment for direct falsification, some sort of a system of fines.
In order to improve the mechanism of taxation of minerals should: •to rebuild the mechanism for collecting the mineral extraction tax so that it differentially takes into account the quality of the deposits, namely, the rich or depleted availability of mineral resources;
•to cancel ineffective benefits, as the current practice of applying benefits under the mineral extraction tax showed that taxpayers often use the imperfection of tax legislation to obtain unreasonable tax benefits;
•introduce a new tax, namely a tax on additional income, which will be levied on the income from the sale of oil minus export duty, reduced MET, the cost of production and transportation.
Thus, we can conclude that the taxation of minerals is essential for the economy of the Russian Federation, despite the reduction in revenues of this tax. Therefore, it is very important to rationally and correctly plan all the elements of this tax in order to avoid financial losses not only of the organizations themselves, but also of the state as a whole.
References:
1. Federal Law No. 126-FZ of August 08, 2001 (as amended on December 27, 2009) "On Amendments and Additions to Part Two of the Tax Code of the Russian Federation and Certain Other Acts of the Legislation of the Russian Federation, and on the Repeal of Certain Legislative Acts Of the Russian Federation "// http://www.consultant.ru (Date of circulation 20.05.2018);
2. Melnikova Yu.V. Improvement and development of taxation of mining of Russian minerals // Financial analytics: problems and solutions. 2010. № 9. C 7782;
3. Podych Yu.V. Efficiency of the legal regulation of levying a tax on the extraction of minerals // Tax bulletin. - 2012. - №2. - P. 37-41;
4. Yumaev MM Taxation of the main types of mineral raw materials: problems and directions of improvement // Official materials for the accountant. Comments
and consultations. 2009. № 12;
5. The Federal Law "On the Federal Budget for 2018 and the Planning Period of 2019 and 2020" of 05.12.2017 N 362-FZ (last version) // http://www.consultant.ru (Date of circulation 05/20/2018);
6. Law of the Republic of Dagestan of December 20, 2017 No. 100 "On the Republican Budget of the Republic of Dagestan for 2018 and for the Planning Period of 2019 and 2020" // http://www.consultant.ru. (Date of circulation on 05/20/2018);
7. Arkhipov DV. Taxation of enterprises under subsoil use // Bulletin of TSPU. 2007. № 9 (72). C. 6;
8. Fadeyeva A. Oil workers earned on falling oil prices. URL: https://www.rbc.ru/business/12/02/2018/5a7db5f19a7947957ee43412 (Date of circulation 05/20/2018);
9. Anishchenko VA The Influence of New Rules of Transfer Pricing on the Possibility of Introducing a Tax on Additional Incomes // Journal of Russian Entrepreneurship. 2014. No. 9 (255);
10. L. Nowak estimated the surplus at 1 trillion. rub. receipts from the tax reform of oil. URL: https://www.rbc.ru/business/21/11/2017/5a145a649a7947625cee2202 (Date of circulation 05/20/2018).
UDK 1082
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