Russia approves new oil export tax

Russia has announced that it will change the way it taxes oil exports to increase revenue generated from the sale of the product, which is the target of sanctions from Western countries after a price cap was stipulated for Russian oil as a way of cutting off sources of Moscow’s financing of the war in Ukraine.

As of April, Russia will tax oil based on an indicator linked to the price of Brent oil – the international reference index. According to the Financial Times, the Kremlin estimates the move will increase state revenue by 600 billion rubles ($8 billion) in one year.

The modification was revealed by President Vladimir Putin at the end of February and reflects the impacts of the price cap on the Russian economy, especially on government revenue. In addition, the rate pegged to Brent is a way for Russia to keep up with fluctuations in international prices even under the spending cap regime.

The effects of the conflict in Ukraine also reduced the profits of large and medium-sized Russian companies by almost 50% in the second half of 2022 in annual terms, according to an estimate by Russian analysts from the consulting network FinExpertiza based on official data. Again, the wholesale and retail trade sector was hardest hit. The only other time corporate profits have dropped this much was in 2020 due to covid-19.

Source: Valor Econômico

To read the original news article, please go to:  https://valor.globo.com/mundo/noticia/2023/03/23/russia-muda-imposto-de-exportacao-de-petroleo-1.ghtml

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