MOSCOW, April 9 (UPI) -- Russia plans to raise tax rates for its oil sector while lowering payroll taxes for other businesses, the New York Times reports.
The government would lower the tax bill for other Russian businesses by $9.8 billion (280 billion rubles), giving small- and medium-sized businesses extra funds for investing or wages, Russian Prime Minister Mikhail Fradkov said during a national television appearance. The new oil sector taxes would bring in extra revenues of $2 billion to $3.5 billion, but would only partly make up for the lower payroll taxes. The average payroll tax would be cut from 29.4 percent to 24.1 percent.
The government proposed raising the base tax rate for oil extraction to $14.03 (400 rubles) per ton from $12.17 (347 rubles) per ton. Oil export duties would also increase from 40 percent to 65 percent for oil selling for more than $25 a barrel, and would increase from 35 percent to 45 percent for oil selling for $20-$25 a barrel. The move must first be approved by Russia's parliament and then President Vladimir Putin.
Analysts said they anticipated a much bigger tax hike proposal for the oil industry.
