Government approves reverse excise tax on synthetic rubber
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The government has approved a bill that would extend the reverse excise duty to synthetic rubber producers. This is reported by the Ministry of Finance of the Russian Federation.
“The reverse excise duty will be extended to producers of synthetic rubber. Such a bill was approved today at a meeting of the government of the Russian Federation, says in the message.
The press service clarified that the excise tax will be provided from January 1, 2024 upon conclusion of an agreement with the Russian Ministry of Energy. The maximum term of the agreement is 10 years. According to the approved draft law, the maximum amount of compensation is set at 9,150 rubles/ton. Upon termination or expiration of the agreement, the companies will be required to return the previously reimbursed excise tax.
It is noted that the excise tax will depend on the 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.”
In case of unfavorable exchange prices, producers will receive a reverse excise tax from the budget. 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.
Russian President Vladimir Putin instructed the government to develop incentive measures for the production of synthetic rubber 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.
Then Deputy Finance Minister Alexei Sazanov spoke about plans to submit a bill to the State Duma by the end of 2021, but the Ministry of Finance published a revised version of the bill only in February 2022. data source of Vedomosti, the process of submitting the project to the State Duma slowed down due to the geopolitical situation. The initiative is expected to go to the lower house soon, he said in early April.
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