State Duma Hit the Fiscal Target

The bill that the State Duma has passed in the second reading amends the Tax Code sections related to the income tax, unified social tax and severance tax. On June 11, the legislators approved in the first reading the increase in tax-free minimum when calculating the severance tax from $9 to $15, which will annually save over 100 billion ruble for the companies. The Duma also backed up some social amendments aimed at encouraging the companies to spend more for their employees' education, medial aid and real estate mortgage.

The benefits for the oil industry were extended in the second reading. Urged by Vladimir Putin, the lawmakers granted tax holidays for the fields of Russia's continental shelf and the shelf of the northern seas, the Yamal peninsula, the Nenets Autonomous District, the Caspian Sea and the Sea of Azov.

The State Duma Vice-Speaker Valery Yazev said that by granting benefits, the legislators expect the oilmen to spend the saved money for investing purposes and inject it into the upgrade of equipment used to develop the fields with severe conditions of exploitation.

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