UPDATE 1-Russia approves formula-based grain export tax system

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MOSCOW, Feb 8 (Reuters) - The Russian government on Monday approved a formula-based export tax system for wheat, corn and barley that is designed to help combat domestic food price inflation.

The system will come into force on June 2, according to an order signed by Prime Minister Mikhail Mishustin.

Russia’s Economy Minister said last week the country was accelerating plans to switch to a formula-based tax on wheat exports, as part of efforts to curb food price inflation during the COVID-19 pandemic.

The switch to a formula, which will take place a month earlier than previously planned, will mean the tax will automatically rise in response to any increase in prices.

The formula will be set at 70% of the difference between a base price for wheat per tonne and $200, the government said.

Russia previously imposed a series of fixed tariffs on exports, which will start from Feb. 15 and will be in place until the formula is applied.

The tax is designed to cut domestic prices as it curbs exports and therefore increases the amount of wheat available within the country.

The new formula for barley and corn will be similar to that used for wheat, but will use $185 instead of $200 for calculations, the government said. (Reporting by Darya Korsunskaya and Vladimir Soldatkin; Writing Gabrielle Tétrault-Farber; Editing by David Evans and Mark Potter)