Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

2 Tax Debtors Get Oil Exports Slashed




The Russian government has decided to cut access to export pipelines for Sidanko and Onako after the oil companies failed to pay all their taxes, the State Tax Service chief said at a briefing Friday.


Boris Fyodorov confirmed that his service was finally making good its threat to make oil companies pay up, and forecast a fresh wave of swoops on more individuals and companies suspected of dodging their taxes.


"Yes, such a decision has been made," Fyodorov said when asked if a decision to cut the oil companies' pipeline access had been taken.


A Fuel and Energy Ministry spokesman said the decision applied to August exports only.


"The interdepartmental commission on oil pipeline and terminal access decided after the companies failed to pay their debts on Thursday to cut Sidanko's exports in August by 223,000 [metric] tons and Onako's by 37,000 [metric] tons," Sergei Slesarev said. "Further steps will depend on their payments."


Fyodorov said he believed Sidanko had good management and could cover its debts. "But with Onako things are really bad. It needs not only cuts from export pipelines, but a new management," he said.


Russia's tax service on Thursday ordered the seizure of assets in Sidanko, Onako and Eastern Oil for nonpayment of taxes.


The Service said Sidanko owed the state 737.8 million rubles and Onako 214.5 million rubles.


Fyodorov also promised to keep up pressure on other big-time tax dodgers, and said revenues to federal coffers would continue to rise month-by-month.


"We're planning a large number of new actions on both individuals and corporations, though I won't name names yet," the former finance minister said.


Fyodorov said that collecting 12.1 billion rubles ($1.9 billion) in July, nearly 10 percent up on June, showed progress in efforts to end the chronic underfunding of the Russian state that pushed it to the brink of bankruptcy and forced it to seek a $22.6 billion bail-out led by the International Monetary Fund.


But he added he was a long way from his goal of matching revenues to the government's budgeted needs. Taxes this year have covered only about half what ministers planned to spend.


Fyodorov estimated that the state received only about one ruble in four that should, legally, be paid in income taxes.


"I'd like to collect twice as much. But ... miracles don't exist. We must collect more taxes every month," Fyodorov said. He urged lower tax rates to encourage honesty and avoid penalizing growth. "We have to understand that if there is no economic growth and if there are enormous economic problems, we can hardly expect tax revenues to grow," he said.


Estimating that Russia's top 5,000 companies probably owed close to $50 billion in back taxes, much of which they simply did not have, he said he would concentrate on collecting current taxes and supported efforts to ease the tax debt burden.


Fyodorov criticized some of his own officials, admitting both corruption and inefficiency, but he also had harsh words for the opposition-dominated State Duma.


The lower house of parliament took its summer recess before considering some tax legislation that was part of a government package of anti-crisis measures, designed to help secure foreign loans.


The chamber is expected to hold a special session in two weeks to debate these issues, but the outcome is not yet clear. Fyodorov accused some legislators of defending vested regional interests rather than those of the state as a whole and also of failing to understand the need for sweeping tax reform.


"For some reason, the State Duma spends its time on the interests of grannies who make up probably no more than one percent of the total and so is helping tax dodgers," he said.