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. Last Updated: 07/27/2016

Tax War Target Claims Debt Paid

One of the main targets of the Russian government's crusade against large corporate tax dodgers, the oil company Rosneft-Purneftegaz, said Wednesday it already has made good on its tax debt and that a high-profile attempt to force it to pay under the threat of bankruptcy is based on faulty statistics.

The company's response followed a warning Tuesday by the government that six large extraction and manufacturing companies would face bankruptcy proceedings if they do not pay a total of 1.5 trillion rubles ($275 million) in tax arrears within a week.

"Based on current information as of Oct. 16 [Wednesday], the oil company Rosneft-Purneftegaz does not owe anything to the federal budget," said a spokesman for Rosneft, the state holding company that controls Purneftegaz.

According to government figures, Purneftegaz owes back taxes totaling 335 billion rubles, but the Rosneft spokesman said the debts had been paid off through 285 billion rubles worth of oil deliveries and other payments made by Sept. 1.

Government officials were not immediately available for comment.

Meanwhile, other companies targeted by the government's warning were scrambling Wednesday to decide how to respond.

In Almetyevsk, Tatarstan, at the headquarters of Tatneft, the largest debtor on the list with arrears of 407 billion rubles this year, officials declined to comment on the ultimatum pending a meeting of the company's board late Wednesday.

"There is no substance to these measures yet. It's only preliminary moves," an official of the KamAZ truck manufacturer in Naberezhnye Chelny on the Volga River said of the government's threat against the company.

The official, who asked not to be identified, said KamAZ's president, Nikolai Bekh, is currently in Moscow, but he declined to comment on the purpose of the visit. KamAZ's debt to the federal budget this year stands at 86 billion rubles.

The government has threatened that if the companies do not pay by the beginning of next week, the cases will be handed over to arbitration courts that will initiate bankruptcy proceedings.

Lawyers said the authorities have the legal means to bring the cases before a civil court and also to initiate criminal proceedings if managers have hidden income or made false statements to the tax authorities. Under a bankruptcy case, the court would appoint a special manager for the company involved. Ultimately, the court would decide whether to liquidate or restructure the enterprise.

But Pyotr Mostovoi, the head of the Federal Bankruptcy Board, said a bankruptcy proceeding would not exempt a company from having to make its current federal tax payments.

President Boris Yeltsin last week decreed the formation of an emergency commission to enforce tax collection. On Wednesday, Economics Minister Yevgeny Yasin said he expected the joint efforts of the government and the presidential administration, headed by Anatoly Chubais, to substantially improve dismal tax collection.

But a senior analyst said there may be more bark than bite to the latest government initiative concerning the six companies.

"It is a threat game" that the government is playing to recover some of its money, said Gavin Rankin, head of research with the Troika-Dialog brokerage. "It is highly unlikely that the companies will be put into actual bankruptcy," he said of the two oil companies and KamAZ.

"The tax authorities have one of the highest priorities on a liquidation," said Eric Michailov, an attorney with the White & Case law firm in Moscow.