Kazakhstan's State Oil Company Asks Gov't To Benchmark Russia's Tax Maneuver

Kazakhstan's State Oil Company Asks Gov't to Benchmark Russia's Tax Maneuver

ALMATY (UrduPoint News / Sputnik - 05th March, 2021) Kazakh state oil and gas producer KazMunayGas has asked the government to zero export customs duties for offshore projects in analogy with neighboring Russia, Alik Aidarbayev, the head of the company's management board, said on Friday.

"An important question is the possibility of complete exemption of offshore projects from the payment of export customs duties on oil," Aidarbayev told the Kazakh Ministry of Energy at an extended meeting.

Tax relief will "ensure the attractiveness of geological survey in the Kazakh sector of the Caspian Sea and attract strategic investors into the further exploration of fields," according to the company head.

Voicing hope that the Kazakh government will support the initiative, Aidarbayev proposed to move forward using the example of Russia's oil tax reform.

"Russia annually decreases its oil export customs duties toward net zero in 2024, as part of a tax maneuver," Aidarbayev said, going on to ask the Kazakh government to "consider the possibility of carrying out a similar tax reform for a phased reduction of export customs duties on oil and oil products toward complete zeroing."

The official believes that otherwise, if the current fiscal pressure remains unchanged, the Kazakh oil producers will fail to remain competitive against the Russian producers on export markets.