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Kallanish Kallanish

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December, 3rd 2021

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OCT 27
14:25

Russian steelmakers fear additional steel taxes to stay

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The Russian Steel Association fears that the increased severance tax and excise duty on steel, which were initially considered as a temporary measure, will become permanent, it confirmed to Kallanish.

Russian authorities and steelmakers have reached an agreement to set the excise tax rate on liquid steel from 2022 at 2.7% and the mineral extraction tax on iron ore at 4.8% and on coking coal at 1.5% (see Kallanish passim).

This will replace export duties on steel and metals of 15% valid from 1 August to 31 December, 2021, for a minimum rate of $54/tonne for HBI and $115/t for most steel products. They are valid only for supplies outside the EAEU. Russian authorities also hiked the ferrous scrap export duty from €45/t ($52.26/t) to €70/t until the end of the year.

The association recalls in a letter to the Russian government that at its meeting on 23 September with steelmakers, when discussing the parameters of the new MET and excise duty on steel, the new mechanism was discussed for the three-year period 2022-2024.

However, draft law No. 1258307-7 "On Amending Part Two of the Tax Code of the Russian Federation" was introduced to the lower house of the parliament, which does not take into account this need, says Russian Steel. 

"This version of the bill assumes that the term of the new mechanism is not limited and is assumed to be indefinite," says a letter signed by the president of the association and Severstal’s owner Alexei Mordashov.

Svetoslav Abrossimov Bulgaria