Russian minister says $7.5 billion windfall tax off the table for now

Russian trade and industry minister Denis Manturov waits before a meeting of Russian President Vladimir Putin with foreign investors as part of the St. Petersburg International Economic Forum (SPIEF), Russia May 25, 2018. REUTERS/Grigory Dukor

KUBINKA, Russia (Reuters) - Russian government ministries have agreed a proposed windfall tax on metals, mining and chemical companies is “inappropriate” for now, Industry Minister Denis Manturov said on Wednesday.

“With colleagues from other ministries, we reached a common position that as of today it’s inappropriate,” he told reporters on the sidelines of a military forum outside Moscow, adding that companies’ debts had to be taken into considerations.

Earlier in August, Kremlin aide Andrei Belousov proposed to President Vladimir Putin to raise 500 billion roubles ($7.5 billion) a year from metal and mining companies.

The proposal listed Evraz, NLMK, Nornickel, Severstal, MMK, Mechel, Alrosa, Polyus, Phosagro and Acron as among the targeted companies.

The shares of these companies were mixed on Wednesday. Mechel stock was up 5.3 percent on the Moscow exchange after it reported second quarter results.

Russia needs extra budget revenue to meet the economic goals set out by Putin after he began a new six-year term in May. The government has already announced plans to raise value added tax from 2019 and increase the retirement age.

Reporting by Gleb Stolyarov; Writing by Polina Nikolskaya; Editing by Louise Heavens and Mark Potter