A tax on Russian oil companies' additional earnings would be difficult to implement and the Finance Ministry is not ready for it, Presidential aide Arkady Dvorkovich said on Wednesday.
Last year the Energy Ministry said that the mineral extraction tax could be replaced with a windfall profit tax on additional income for the oil sector in 2012-2013.
"The idea of introducing a tax on additional income primarily for oil producers has been discussed for several years. Theoretically, it can work. In practice, personally, I do not believe in it, because it is very difficult from the administrative point of view and leads to burden reallocation between oil companies. This means that some of them win, others lose," Dvorkovich told gazeta.ru newspaper in an on-line interview.
He said the tax could be introduced together with other tax reform measures, including, for example, cancelling value added tax and introducing a sales tax.
"In this case, everything would be OK. However, the Finance Ministry is not ready for that now," Dvorkovich said.
Experts have been discussing the idea of replacing the mineral extraction tax on crude oil with a tax on profit accumulated during field development for several years. Advocates claim it would be a fair tax, as the tax rate would increase with the output.
MOSCOW, January 19 (RIA Novosti)
