The KPMG Oil & Gas experts comment on the probable replacement of the mineral extraction tax (MET) system by a more efficient taxation model.
The KPMG professionals believe the mineral extraction tax (MET) system is outdated and needs to be replaced by a more progressive taxation regime, which will guarantee budget revenues, stimulate investments in the oil & gas sector, and simplify tax administration for both companies and tax authorities. Our colleagues explain: "In our opinion, an efficient substitution for MET may be a taxation model that takes into account the economics of oil and gas field development. Its key benefit is that excess profit from high-margin oilfields is withdrawn as taxes to the state budget, while currently non-profitable oilfields enjoy a reduced tax burden."
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