Kazakhstan turns to fuel taxes to fill budget gap

Kazakhstan’s Ministry of Trade and Integration has proposed imposing a $60-per-ton export duty on additional types of oil products to boost budget revenues, according to a draft order published on the Legalacts.egov.kz portal. The draft is open for public comments until Dec. 13.

«To replenish the budget of the Republic of Kazakhstan, the Ministry of Finance has proposed establishing export customs duties on approximately 320 commodity items. Following this proposal, we have approved the establishment of export duties on hydrocarbon mixtures to identify additional budgetary revenue sources,» the Ministry of Trade stated.

The ministry aims to expand the list of oil products subject to export duties. The proposed additions include cyclic and acyclic hydrocarbons, petroleum jelly, certain types of bitumen and bitumen mixtures, lubricants, solvents, additives and biodiesel. The $60-per-ton export duty would apply to these items and remain in effect permanently.

Currently, the list of products subject to export duties includes crude oil and certain other oil products. Export duties on crude oil are calculated based on the average market price and adjusted by a correction factor. If the price drops below $25 per barrel, the duty is waived. The same principle applies to light, middle and heavy distillates.

The export duty on heavy distillates and gas oils for various purposes is $60 per ton from mid-October to mid-February. From February to October, exporters pay €200 per ton.

Certain products are consistently subject to a $60-per-ton export duty, including oils and other products derived from the high-temperature distillation of coal tar, lubricating oils and waste oil products. Fuel oil exporters pay a lower rate of $30 per ton. For oil bitumen, the export duty is $60 per ton from June 1 to Sept. 30 and €15 per ton from Oct. 1 to May 31. Bitumen mixtures are subject to an export duty of 15% of their value.

These export duties apply unless Kazakhstan has bilateral or multilateral agreements with specific countries that provide exemptions for crude oil and oil-derived products. Exports to Armenia, Belarus, Russia, Kyrgyzstan, Moldova, Tajikistan and Uzbekistan are also exempt from these duties.