Draft on reverse excise duty on synthetic rubber passes first reading in State Duma

Draft on reverse excise duty on synthetic rubber passes first reading in State Duma



The State Duma adopted in the first reading a bill that provides for the extension of the reverse excise tax on synthetic rubber producers from 2024. This should from the Duma electronic database.

The draft law provides that the excise tax will be provided from January 1, 2024 upon conclusion of an agreement with the Russian Ministry of Energy. The agreement will be valid for up to 10 years.

The document sets the maximum amount of compensation in the amount of 9150 rubles per ton. This is done in order to limit the amount of shortfall in income, specified in the Ministry of Finance. Upon termination or expiration of the agreement, the companies will be required to return the previously reimbursed excise tax.

The excise tax will depend on exchange prices for natural rubber in the Singapore market, as well as butane and butadiene in the Rotterdam market, since "in Russia there are no generally recognized objective market quotations for synthetic rubbers and raw materials for their production."

Producers will receive a reverse excise tax from the budget in case of unfavorable exchange prices. In a good scenario, companies will pay excise within the previously refunded excise with indexation. This will reduce budget spending on support measures, the ministry explained.

Incentive measures for the production of synthetic rubber were instructed to be developed by Russian President Vladimir Putin back in 2020. In 2021, the Ministry of Finance published draft amendments to the Tax Code, which provide for the introduction of a reverse excise tax on synthetic rubber in the amount of 3,660 rubles per ton. The Ministry of Finance presented a revised version in February 2022. According to a Vedomosti source, the process of submitting the project to the State Duma slowed down due to the geopolitical situation. As a result, in April 2023 he was approved government, and on 21 April introduced to the lower house of parliament.



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