Kazakhstan wants parliament to ratify oil deals

Tue Jun 3, 2008 11:20am BST
 
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ASTANA, June 3 (Reuters) - Oil and mining companies operating in Kazakhstan will have to obtain special permission from parliament if they want to avoid paying new taxes and export duties next year, Prime Minister Karim Masimov said on Tuesday.

Kazakhstan introduced an oil export duty last month, but most large foreign companies working under production sharing agreements (PSAs) are exempt. The country also plans to change its tax code later this year.

"If the new tax code is approved, starting from Jan. 1 2009 every subsoil user working in Kazakhstan will have to pay a mineral extraction tax and an export duty unless its contract is ratified by parliament," Masimov told the upper house.

The introduction of the new duty, seen by analysts as part of a growing global trend of resource nationalism, has alarmed foreign companies that have invested billions of dollars in the resource-rich Central Asian state.

"According to the new tax code, the taxation of subsoil users will be regulated by the tax code itself in the first place and not be the contracts signed earlier," Masimov said.

He said the government sought to make more companies pay the newly introduced oil export duty, but did not name the potentially liable producers.

Some analysts say Kazakhstan is unhappy with the terms of oil contracts signed in the 1990s when the nation needed cash and foreign investors to overcome a post-Soviet economic slump. (Reporting by Raushan Nurshayeva; Writing by Olzhas Auyezov)

 

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