Auditor Suggests Oil Shale Tax (1)
The National Audit Office has proposed that the Estonian government raise additional revenue by levying a profit tax on shale oil, but producers say environmental fees should first be reduced.
Eesti Energia's finance director, Margus Kaasik, told ETV he would in principle support tying resource taxation to profits, but expressed doubt that the government would go through with it.
"The government has previously analyzed this issue and found that, at least at the moment, it is not useful and it was left at that," Kaasik said.
The idea was reportedly abandoned because a profit tax would not give the government the possibility of calculating state budget revenue ahead of time, due to the fluctuation of oil prices.
Kaasik and the private producer VKG say the government should first re-examine environmental fees, which they say are excessive and only cover a minor portion of environmental damage.
Last April, environmental fees for shale oil production rose 20 percent and they are set to rise again by an equal amount running up to 2015.
Minister of Environmental Affairs Keit Pentus-Rosimannus has a new tax would not be reasonable.
"It would create a schizophrenic situation where the state is demanding on the one hand that the sector move toward higher valuation of the rock, toward extracting an increasingly greater value from the rock, but on the other hand says that if you do this then we will jab you with another tax," the minister said in a recent interview on ERR radio.