Efficiency of Application of Tax on Additional Income from Hydrocarbon Raw Materials

Milyausha R. Pinskaya () and Yuliya A. Steshenko ()
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Milyausha R. Pinskaya: Financial Research Institute, Moscow, Russian Federation; Financial University under the Government of the Russian Federation, Moscow, Russian Federation
Yuliya A. Steshenko: Financial Research Institute, Moscow, Russian Federation

Finansovyj žhurnal — Financial Journal, 2025, issue 3, 8-24

Abstract: Despite an increase in the share of non-oil and gas revenues in the federal budget of the Russian Federation, the Russian economy is still largely dependent on oil and gas revenues. As a result of the tax reform in the oil and gas sector, the role of revenues from the tax on additional income from hydrocarbons (hereinafter referred to as the TAI regime) has significantly increased, as well asthe quantity of mineral resources extracted in subsoil areas where TAI is applied. The TAI regime is preferential, since it implies the availability of tax incentives and a significant amount of tax expenses arising from their application. However, ineffective tax benefits that result in tax expenditures may significantly limit the growth and development of the oil sector in Russia. It should also be noted that the negative impact on the environment and carbon footprint is increasing due to the growth of production volumes. That is why the topic of this study is relevant. The purpose of the study is to identify the key features of taxation of subsoil areas where the TAI regime is applied and to assess the effectiveness of the comprehensive tax incentive. The hypothesis of the study is that the amount of tax expenditures resulting from the application of the TAI regime is lower than the volume of investments and the amount of tax expenditures in subsoil areas where the TAI regime is applied. As a methodological basis, a system analysis of the provisions of legislation in the field of taxation of natural resources was used. The effectiveness of the TAI regime was assessed using the methods of statistical data analysis. The study creates a methodological tool for assessing the effectiveness of investment-oriented tax incentives, which includes the TAI regime, thereby contributing to the growth of knowledge in the area of taxation theory. From an applied point of view, the results are useful for the development and justification of decisions on improving and (or) expanding the TAI regime in Russia.

Keywords: tax on additional income from hydrocarbon extraction; tax on mineral extraction; investment; comprehensive benefit; tax expenditures; oil and gas revenues; tax incentives; carbon footprint (search for similar items in EconPapers)
JEL-codes: H21 H22 H23 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:fru:finjrn:250301:p:8-24

DOI: 10.31107/2075-1990-2025-3-8-24

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