Russian industry, finance ministries resume talks on changing steel excise formula
ST. PETERSBURG. June 8 (Interfax) - A compromise in the debate between the Industry and Trade Ministry and Finance Ministry about revising the excise on liquid steel could be to change the calculation formula, and the Finance Ministry generally agrees that such an adjustment is the right path, Industry Minister Anton Alikhanov said.
"We, as you know, have diametrically different positions with our colleagues from the Finance Ministry. Our argument is that this measure was introduced as a temporary one. But, as is often the case, one always wants to turn a temporary revenue source into a permanent one. We hope to find some sort of compromise. In any case, revising the formula to a fairer one, taking into account current price realities, would be right," Alikhanov told reporters on the sidelines of the St. Petersburg International Economic Forum.
"In working contacts, colleagues from the Finance Ministry agree that this would probably be the right path, to not completely drop this excise, but revise the formula in order to ease the additional fiscal effects that the industry is now feeling on top of all the difficulties with the exchange rate and pressure on their exports," Alikhanov said.
He also said discussions are continuing on the possible configuration of the excise on imported steel. This issue was raised in preparations for the meeting of the Supreme Eurasian Economic Council in Astana at the end of May.
One of the challenges is to synchronize decisions on this protective measure with other member countries of the Eurasian Economic Union (EAEU), Alikhanov said. He did not disclose the details of the discussions, but said some sort of countervailing mechanisms are possible so as to avoid retaliatory measures.
The steel excise on Russian producers, which was initially seen as a temporary measure, was introduced on January 1, 2022. Under the formula for calculating the excise for vertically integrated steelmakers, it drops to zero if the export price for slabs in the calendar month (Tsslab indicator), multiplied by the average U.S. dollar/ruble exchange rate for the calendar month, is less than 30,000 rubles.
While speaking with reporters at the St. Petersburg forum, Alikhanov said his ministry has prepared proposals for the price at which the excise zeroes out, but he did not specify the cut-off.
A year ago, the minister said in an interview with Interfax that government agencies were continuing work on revising the excise calculation formula and that there were plans to introduce a new threshold value for calculating it as of January 2026. However, the Finance Ministry did not support the proposal.
In the spring of this year it was reported that the Finance Ministry had drafted a bill to impose an excise on certain types of liquid steel products imported into Russia in order to even out the tax burden on domestic and foreign steelmakers. Deputy Finance Minister Alexei Sazanov said the formula for the new excise on imported steel would be linked to the end product.
A decision on the new excise on imported steel could be made in the fall in the preparation of the new budget.
