Russia should move to a profit-based oil tax system and abandon tax breaks for East Siberian oil fields to avoid fiscal risks, the Prime Tass news agency said Friday, citing the head of the Finance Ministry's tax department, Ilya Trunin.
Trunin criticized tax breaks granted last year to companies developing certain oil fields in East Siberia and the Arctic region, saying federal budget revenue may fall 120 billion rubles ($4.0 billion) in 2010, as output declines at fields in other parts of the country.
"We should move toward taxation of excess profits," Trunin said.
State-controlled companies like OAO Rosneft (ROSN.RS) and Surgutneftegaz (SNGS.RS) are benefitting from zero export duty on newly developed fields in East Siberia. But Russian oil majors have argued for a profit-based tax.