Russian Economy, Finance Ministries at Odds Over Hydrocarbons Tax

The Russian ministers of economy and energy have stated their opposition to an increase in taxes on hydrocarbons. The statements came Wednesday after Russian Finance Minister Anton Siluanov presented a plan to raise taxes on all oil and gas development with the intention of using the funds to bolster the struggling Russian economy. An increase, Siluanov argued, would create $600 billion in new revenue as Russian oil and gas production is currently near post-Soviet highs.

Russian Deputy Minister of Economy Nikolay Podguzov countered this argument saying that the increase would stymie production and discourage new investment within Russia. Podguzov also denied that a tax increase would lead to $600 million in new revenue, characterizing it is as a “significant overestimation.” Russian President Vladimir Putin has thus far refused to take a position on the issue, preferring instead to encourage discourse and discussion related to the possible increase.

The Russian economy has continued to struggle amid low oil prices and Western sanctions. A new figure released by Rosstat indicates that unemployment in August 2015 is up 13.5 percent when compared to similar statistics from 2014.

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