Russia's government won't replace the current oil export duty and mineral extraction tax with an excess profit tax, VTB says, following the finance ministry's comments on Friday.
Says this would sterilize producer's excess returns, while also stimulate investments in low-productive and high-cost projects. "The government is likely to implement a mark-up to the statutory tax rate of 20%, which would largely replace the current mechanism," says analyst Lev Snykov.
"In our view any mechanism would not start to operate before 2011-12, with a notable risk of delays." (JGP)