Journal of Tax Reform
Cluster analysis of Russian oil companies based on tax burden parameters
I. V. Filimonova 1, 2, I. V. Provornaya 1, 2, S. I. Shumilova 1, 2, E. A. Zemnukhova 1, 2
1 Institute of oil and gas geology and geophysics. A. A. Trofimuk of the SB RAS, Novosibirsk, Russian Federation
2 Novosibirsk National Research University, Novosibirsk, Russian Federation
Abstract
The oil industry occupies an important place in Russian economy and in the global energy supply system. The industry has recently been facing a number of internal and external problems, for example, the deteriorating quality and structure of the product base and an increase in the share of tight oil reserves. Confronting these challenges will inevitably incur costs, which will directly affect oil companies’ financial performance. The Russian government uses taxation to incentivize oil companies to improve their efficiency, which renders the question of tax burden particularly salient. This study aims to analyze the tax burden on the Russian oil industry in the period from 2010 to 2017 and to identify the key factors that shape the structure and dynamics of oil companies’ tax payments. The article provides an overview of Russian and international research literature on the problem of tax burden. The role of oil and gas revenues in the structure of the Russian federal budget is shown. The analysis demonstrates that there has been a steady decline in the tax burden on oil companies in recent years due to the changes in the method of calculating the mineral extraction tax and export duties as well as the expanding range of preferential categories of subsurface use objects. The factor analysis combined with quantitative analysis reveals the factors that determine the dynamics and structure of oil companies’ tax payments. The method of cluster analysis is applied in this study to compare the performance of Russian oil companies according to a set of tax burden parameters. The companies are divided into three clusters and specific recommendations are provided for each cluster. For example, Gazprom Neft and LUKOIL have a low tax burden and can be seen, therefore, as potential donors of tax revenues; Rosneft, Bashneft and Tatneft need to increase their efficiency through non-tax optimization; a suitable strategy for Surgutneftegaz, RussNeft, and Slavneft, in our view, would be to adjust the structure of their production activities to increase the share of the domestic crude oil market. Based on the results of the cluster analysis, the authors propose guidelines for reforming taxation of the oil industry and describe the main stages of this process.
Keywords
oil industry, tax burden, tax maneuver, oil and gas revenues, cluster analysis
JEL classification
H21, H32, L71, L52References
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Acknowledgements
The research was supported by the Russian Foundation for Basic Research (project No. 18-310-20010) and by the Presidential Grant for Young Russian Scientists (MD-6723.2018.6).
About Authors
Irina V. Filimonova – Doctor of Economics, Professor, Head of the Department of Political Economy Faculty of Economics, Novosibirsk National Research State University (1 Pirogova St., Novosibirsk, 630090, Russian Federation); Leading Researcher, Institute of Petroleum Geology and Geophysics A.A. Trofimuk SB RAS, (3 Prospekt Akademik Koptyug St., Novosibirsk, 630090, Russian Federation); ORCID: 0000-0001-6833-6748; e-mail: filimonovaiv@list.ru.
Irina V. Provornaya – Candidate of Economic Sciences, Associate Professor at the Department of Political Economy Faculty of Economics, Novosibirsk National Research State University (1 Pirogova St., Novosibirsk, 630090, Russian Federation); Senior Researcher, Institute of Petroleum Geology and Geophysics A.A. Trofimuk SB RAS, (3 Prospekt Akademik Koptyug St., Novosibirsk, 630090, Russian Federation); ORCID: 0000-0001-6581-2921; e-mail: provornayaiv@gmail.com.
Svetlana I. Shumilova – graduate student of the Economic Faculty, Novosibirsk National Research State University (1 Pirogova St., Novosibirsk, 630090, Russian Federation); Junior Researcher, Institute of Petroleum Geology and Geophysics A. A. Trofimuk SB RAS, (3 Prospekt Akademik Koptyug St., Novosibirsk, 630090, Russian Federation); ORCID: 0000-0002-2338-7565; e-mail: svetlana.shumilova1410@gmail.com.
Ekaterina A. Zemnukhova – graduate student of the Economic Faculty, Novosibirsk National Research State University (1 Pirogova St., Novosibirsk, 630090, Russian Federation); Junior Researcher, Institute of Petroleum Geology and Geophysics A. A. Trofimuk SB RAS, (3 Prospekt Akademik Koptyug St., Novosibirsk, 630090, Russian Federation); ORCID: 0000-0001-5290-2186; e-mail: ekaterina.zemnuhova@mail.ru.
For citation
Filimonova I. V., Provornaya I. V., Shumilova S. I., Zemnukhova E. A. Cluster analysis of Russian oil companies based on tax burden parameters. Journal of Tax Reform. 2019;5(1):42–56. DOI: 10.15826/jtr.2019.5.1.059
Article info
Received September 24, 2018; accepted March 20, 2019
DOI: http://dx.doi.org/10.15826/jtr.2019.5.1.059
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