Ferrous metallurgy enterprises are asking the government for additional tax benefits
The Russian Steel Industry Association of Ferrous Metallurgy is asking the Ministry of Finance and the Ministry of Industry and Trade, in addition to deferrals for the payment of excise duty on liquid steel and mineral extraction tax on iron ore, to postpone the payment of insurance premiums with the possibility of gradual payment in the first half of 2026. The savings on interest on attracted loans are estimated at 1.19 billion rubles.
Production of rolled metal products at the small-grade wire mill 250 of the Izhstal plant. Illustrative photo: "Mechel".
In addition, the association asks not to apply the methods provided for by the Tax Code for the fulfillment of duties to pay taxes, fees, and insurance premiums in respect of debts incurred on August 1.
The proposals are described in a September letter from the association to Ministers Anton Siluanov and Anton Alikhanov, which was reviewed by Kommersant. The content was confirmed by interlocutors in two large metallurgical companies. The Ministry of Industry and Trade and the Ministry of Finance did not respond to questions.
As noted in the appeal of Russian Steel, these support measures are extremely important for individual companies to prevent delays in salary payments and other mandatory payments.
For the rest, the letter says, this will reduce the cost of servicing loans and direct funds to cover the shortfall in financing current and investment activities. Savings for the industry on interest on attracted loans from deferral of payment of excise duty on liquid steel and mineral extraction tax on iron ore until the end of 2025 are estimated in circulation at 1.04 billion rubles, from deferral of payment of insurance premiums — at 1.19 billion rubles.
So far, the government has decided only to grant metallurgists a deferral for the payment of excise duty on liquid steel and mineral extraction tax on iron ore until December 1, 2025, Deputy Finance Minister Alexei Sazanov said on October 7. The deferral applies to payments with dates from September to November inclusive. This will allow interested parties to free up funds to overcome the consequences of the current situation, the explanatory note says.
Russian Steel notes in its letter that in 2024, exports of metallurgical products fell by 7.9% year-on-year and by 35% by 2021, to 20 million tons, and the high key rate and the termination of mass preferential mortgage programs led to a decrease in domestic steel consumption by 5.6%.
The production of rolled products in the Russian Federation decreased by 6.4% last year, and by 13% by 2021, to 61 million tons. In 2025, domestic steel demand may decline by 12% due to the pressure of high interest rates, a recession in construction and engineering, and a shift to the right of infrastructure projects in the energy sector, Russian Steel predicts.
At the same time, the appeal notes, metallurgical companies are experiencing difficulties with lending to investment projects.