The Ministry of Finance came up with the idea of increasing the mineral extraction tax on gold
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The Ministry of Finance unexpectedly came up with the idea of increasing the mineral extraction tax on gold from June 1 until the end of the year. The reason is the cessation of revenue from export duties, since the export of gold, according to the Ministry of Finance, went through individuals who did not pay duties. Gold mining is now on the rise due to constantly rising prices for raw materials, but at the same time, if exports normalize, the industry risks falling under double taxation, experts point out.
The Ministry of Finance proposed to temporarily increase the mineral extraction tax on gold. On April 5, the State Duma Committee on Budget and Taxes approved an amendment to the Tax Code, according to which, from June 1 to December 31, 2024 inclusive, an additional coefficient for gold mining is introduced to the mineral extraction tax in the amount of 78 thousand rubles. for 1 kg.
Deputy Minister of Finance Aleksey Sazanov, who spoke during the committee meeting, explained the increase in the mineral extraction tax by the fact that after the introduction of exchange rate export duties, gold exports stopped. “Individuals began to buy gold through banks, and our exports practically stopped,” said Mr. Sazanov.
As noted earlier by the Ministry of Finance, the combination of tax innovations actually led to the actual withdrawal of gold exports into the shadows with tax revenues being zeroed (see. “Kommersant” dated January 10, 2024).
On the one hand, from March 9, 2023, VAT (20%) on investment gold and personal income tax (13%) on the sale of gold bars were abolished for individuals; on the other hand, the taxation of legal entities was tightened: from October 1, 2023, exchange rate export duties were introduced (up to end of 2024). They are tied to the ruble exchange rate and range from 4% to 7% at an exchange rate above 80 rubles/$ (since October 1, 2023, the dollar exchange rate has been constantly above this level, exceeding 92 rubles/$ on April 5).
As a result, banks have noted a rush demand for gold since the end of last year, and the Ministry of Finance estimated the volume of such purchases at the end of 2023 at 95 tons, banks spoke about 75 million tons with a basic estimated level of 50 tons (gold production in the Russian Federation in 2023 was , according to preliminary data, 421.8 tons). And if it is possible for a citizen to export gold worth up to €10 thousand without declaring and up to €25 thousand with filling out a declaration, bypassing the export duty with the help of groups of citizens has become a problem that was recognized by both the Ministry of Finance and the Federal Customs Service.
As Alexey Sazanov reported on April 5, on the instructions of Prime Minister Mikhail Mishustin, a meeting was held with the head of the Ministry of Finance Anton Siluanov with the participation of the largest gold mining companies. As a result, a compromise solution was developed. “We still expect money from them, we need revenues, we agreed that by the end of the year 15 billion rubles. they will pay us,” the official said. “In order for these revenues to exist, in the absence of exports, a decision was made to increase the mineral extraction tax, and a guaranteed fixed “slap” was introduced to collect 15 billion rubles. and not be tied to export volumes.”
The head of the Union of Gold Miners of the Russian Federation, Sergei Kashuba, notes that there was no broad discussion of tax changes with the industry.
“We have not seen any calculations,” he says. “Yes, there is an increase in metal prices, but gold miners remain subject to export exchange rates. The export situation may change. The result is double taxation.”
In March-April, the price of gold on the spot market updated its historical maximum several times (see. “Kommersant” from March 29). On April 5, the price was $2,287 per troy ounce after reaching another record high of $2,305 the day before. “Gold will continue to rally with the usual pullbacks,” writes Reuters, citing Luca Santos of ACY Securities.
Due to rising gold prices, several Kommersant sources among mining companies called the effect of the tax increase restrained. According to Gazprombank Investments, key representatives of the sector are in a stable position. Since the mineral extraction tax on gold was not raised before, and prices are now high, the profitability of producers is also at its maximum, comments Dmitry Smolin, senior analyst at the Sinara investment bank. For Polyus, for example, in absolute terms, the increased tax implies a decrease in revenue by only 3.1 billion rubles. with adjusted profit of 200 billion rubles.
Gold mining companies did not provide comments.
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