Audit Chamber has recently finished checking how effectively taxes are collected from oil companies.

Friday, June 5, 2020

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The Audit Chamber has recently finished checking how effectively taxes are collected from oil producing and refining companies. Auditors are puzzled about why Yukos alone is faced with tax arrears worth hundreds of billions of rubles, as all the major oil companies have used tax minimizing schemes too, Vedomosti reports. A staff member of the Audit Chamber has said that auditors checked how LUKoil and Sibneft paid local taxes, and examined the transfer pricing of TNK-BP and Rosneft. Vladimir Panskov, an auditor with the Audit Chamber who led these checks, elaborated on the new "tax scheme": the company pays taxes in full but then the local authorities return 80% of the taxes the company pays to the local tax budget under an agreement between the company and the regional administration. But, Panskov had to admit, "they all act strictly within the law." To put an end to this practice, the Audit Chamber proposed that amendments be introduced to Article 80 of the Budget Code, which allows non-state organizations to be financed by the budget. TNK-BP believes that the Audit Chamber claims have nothing to do with them. "There is no question about returning 80% of the taxes. Our only privilege is 4% of the profit tax contributed to a region's development," a spokesman for the company said indignantly. A representative of the Tyumen region administration has acknowledged that if the subvention mechanism is outlawed, the regional authorities will have to "look for other ways of cooperation with oil companies within the law." "How else can investors be attracted?" he asked. A source in the Audit Chamber has argued that LUKoil used such schemes in the Perm region and the Komi Republic. However, the Prosecutor General's Office has already begun combating subventions with a case against Yaroslavl Governor Anatoly Lisitsyn, who was recently accused of abuse of power. The charges came after he signed the locallaw "On the Encouragement of Economic Development in the Yaroslavl Region," which allows local taxpayers to receive up to 80% of regional and local taxes in the form of subventions.

Bookmark Audit Chamber has recently finished checking how effectively taxes are collected from oil companies.