08/07/1998 12:30:29 FOCUS-Russia uses carrot and stick to collect tax
By Aleksandras Budrys
MOSCOW, Aug 7 (Reuters) - The Russian government on Friday
came down heavily on major tax debtors in the energy sector,
while showing at the same time it was willing to offer a carrot
to those who were ready to pay.
The government announced on Friday it had cut export rights
to Russia's fifth largest oil company by output SIDANKO by
223,000 tonnes and to Onako, the eighth biggest, by 37,000
tonnes for failure to pay taxes in time.
But on Thursday Prime Minister Sergei Kiriyenko visited the
headquarters of gas monopoly Gazprom with the clear intention of
demonstrating the government's reconciliation with the company
after a major row over tax underpayment by Gazprom.
Gazprom has now paid the state 3.1 billion roubles in
current taxes after the government ordered the seizure of
Gazprom assets. The order was suspended after the government and
Gazprom agreed to settle mutual debts by August 1.
Kiriyenko told reporters the government was ready to help
the gas company and the national electricity grid RAO UES to
collect cash payments for supplies to consumers which were
financed by the federal budget.
Russian Tax Service Chief Boris Fyodorov told reporters on
Friday the government was in the process of resolving tax
problems with UES. "The work (with UES) is bearing fruit," he
Earlier Fyodorov had said export cuts might also be applied
to Russia's biggest oil company LUKoil, but LUKoil managed to
clear all tax dues before the August 1 deadline.
Fuel and Energy Minister Sergei Generalov said on Thursday
the government intended to give LUKoil guarantees to help it
receive an international syndicated loan of between $1.5 billion
and $4.0 billion.
In July a group of Russian oil companies including LUKoil
and the second biggest, YUKOS, appealed to the Russian
government and the President over taxation policies which it
said were crippling the key energy sector.
The State Tax Service said on Thursday it had ordered the
seizure of assets of SIDANKO, Onako and YUKOS-controlled Eastern
Oil, for non-payment of taxes.
But the companies said on Friday they were not aware that
any seizures had taken place so far.
An Eastern oil spokesman said the company's management was
set to hold talks with state representatives to find a way out
of the situation.
SIDANKO was also ready to negotiate, but at the same time
said the government was too quick to apply sanctions.
"The exports have been reduced inappropriately," said Larisa
Zelkova, head of the information department at UNEXIM Bank,
which controls SIDANKO.
She said SIDANKO and some other oil companies, at the
suggestion of the government, had signed a protocol in June with
the Tax Service under which they guaranteed part of their
subsidiaries' debts with credits backed by oil exports in the
"As this protocol doesn't seem to have worked, as far as I
know, SIDANKO has been trying to negotiate some constructive
solution with the government," Zelkova said.
Onako told Reuters it was ready to pay, despite losses
caused by the collapse in world oil prices.
"I believe in the middle of August the problem will be
solved," Onako's vice-president Irik Uzbekov said.
Kiriyenko on Wednesday met several Russian oil chiefs, who
pleaded with the government to lower the tax burden on oil
companies and change the excise duty on oil.
But Kiriyenko successfully insisted that the companies paid
their current taxes in full.
The two sides decided at the meeting to set up a body in the
next few days to create a flexible tax system for the oil sector
"which will take into account international circumstances and
other external factors".
But Russian economic daily Kommersant said this commission
would have little effect, suggesting it had only been proposed
to buy time for the government before new demands were made by
the oil barons.