The Russian State Duma (the lower house of the Parliament) has approved a plan to introduce a profit-based tax on the oil industry as of January 2019. The Russian tax system is currently based on production via the mineral extraction tax (MET) and exports and the tax is adjusted to reflect the global oil prices fluctuations along with the depletion and the volume of oil reserves. The new tax will initially apply only to some pilot projects - mainly some depleted assets in Western Siberia fields that benefit from lower export duties and new fields in Western and Eastern Siberia - before being introduced at full scale in 2019.
The tax was initially planned for 2018 but disagreements over the reform among ministries have been stifling its progress. The tax legislation is now expected to be approved by the upper house of the Parliament and the Presidency before being translated into a proper law. Once implemented, it is expected to boost the domestic output by 900 kt/year (18,000 bbl/d).
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