MOSCOW, April 17 (RIA Novosti) - The economics ministry said Monday it had submitted for government consideration a bill on zero-rate severance tax aimed at boosting output in key natural-resources sectors.
The bill will introduce tax holidays for companies developing new deposits, and major privileges for those working on depleted deposits, in a bid to avert a medium-term production decline in industries that provide much of Russia's budget revenues, particularly the oil and natural-gas sectors.
"The bill has been agreed with all the agencies involved and sent to the government for consideration," a ministry spokesman said.
In late March, minister German Gref said oil and natural gas output, which accounts for 25% of GDP and is a major source of budget revenues, had grown 7% annually in recent years, but that this figure was now dropping annually to 1%-2%.
If approved, zero-rate severance tax will be imposed for new deposits for up to 10 years starting 2007, although the tax holiday could be shortened if the deposit in question makes a profit.
The degree of deposit depletion will be considered for tax differentiation, and lower rates could be set starting 2008 for deposits more than 85% depleted.
