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2015.09.08 13:45

Lithuanian PM expects new shale gas taxation rules to be adopted this autumn

DELFI EN | The Lithuania Tribune2015.09.08 13:45

Lithuanian Prime Minister Algirdas Butkevičius expects that the government and the parliament will approve new rules for taxing shale gas exploration and production this autumn. He also hopes the rules will be favourable for investors and will open the way for launching a new tender for a shale gas production license.

Lithuanian Prime Minister Algirdas Butkevičius expects that the government and the parliament will approve new rules for taxing shale gas exploration and production this autumn. He also hopes the rules will be favourable for investors and will open the way for launching a new tender for a shale gas production license.

"I think that (amendments to legislation on shale gas taxation) will be approved during the Cabinet's meeting on Wednesday and then these draft laws will go to the Seimas. I believe that the Seimas will also endorse the legislation once debates start and we will then announce a public tender," Butkevičius said on LRT Radio on Tuesday.

The Environment Ministry proposes that shale gas production should not be taxed in the first three years, but not longer than until the start of 2020, and then be subject to a 15 percent tax rate. It is also proposed that 90 percent of the tax proceeds should go into the central government's budget and the remaining 10 percent to the local governments of locations where share gas is extracted.

"It is proposed that 10 percent of the tax is left to the local governments in whose territories shale (hydrocarbons) are extracted so that they are interested in attracting investment to their districts and in new jobs being created after exploration is carried out and production is launched," Butkevičius said.

The US energy company Chevron in October 2013 withdrew its bid for a shale gas exploration license in Lithuania, citing changes in the fiscal, legislative and regulatory climate as the reason.

It is expected that a new tender will be launched as soon as the government and the parliament approve a new legislative package.

BNS

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