ST. PETERSBURG. June 24 (Interfax) - Russian steelmakers are proposing to index the cut-off price used to calculate the excise tax on steel, which was set at 30,000 rubles per tonne in 2022, by accumulated inflation over the past four years, Severstal CEO Alexander Shevelev said in an interview with Interfax on the sidelines of the St. Petersburg International Economic Forum.
"We have submitted our proposals to the relevant ministries. They are still being discussed. We don't know what the final decision on the excise will be," he said.
"If it's not possible to eliminate this outdated measure, which was introduced as a tax on windfall profits that are now out of the question, our proposal comes down to at least approving an indexation formula for the slab cut-off price of 30,000 rubles. We believe that it would be fair to use in calculation the cut-off price set in 2022 taking into account accumulated inflation over four years and ensure it is indexed going forward. We're waiting for the decisions of relevant agencies," Shevelev said.
The company told Interfax that industry association Russian Steel proposed using the cut-off price of 30,000 rubles set in 2022 and indexing it for inflation in the years 2022 through 2025, inclusive. The production cost for slabs, even at the most efficient Russian steel plants, exceeded 40,000 rubles per tonne in 2024, data from the association showed.
Industry and Trade Minister Anton Alikhanov said in an interview with Interfax last week that his ministry is continuing to work on revising the formula for calculating the steel excise and plans to introduce a new threshold value in January 2026.
"The current level of the national currency's exchange rate is, unfortunately, essentially prohibitive for exporters. In this situation we believe it is right to work on optimizing the fiscal burden on the steel industry and reducing regulatory costs," Alikhanov said."
