UPDATE 1-Kazakhstan to double oil duty, metals may escape

* Oil export duty $40/tonne from Jan. 1

* Metals duty excluded from 2011 budget plan

* Personal income tax to rise for high earners

* 2010 GDP growth f’cast seen revised to 5 pct

(Recasts with export duties, revised GDP, analyst comment)

By Raushan Nurshayeva

ASTANA, Aug 31 (BestGrowthStock) – Kazakhstan will double its crude
oil export duty next year and raise taxes on high earners, the
finance minister said on Tuesday, while indicating miners may
escape the Central Asian state’s drive to swell its coffers.

Oil firms operating in Central Asia’s largest economy must
pay $40 to the state for every tonne of crude exported from Jan.
1, a move that will hurt earnings as Kazakhstan asserts control
over foreign investors after a recovery in global oil prices.
“The most substantial contribution to budget revenues (in
2011) is forecast from an increase in the export duty on oil
from $20 to $40 per tonne,” Finance Minister Bolat Zhamishev
told a government meeting.

He later told reporters, however, that an export duty on
metals proposed by government officials from 2011 was not part
of the planning for next year’s budget.

“No, this has not been provided for,” the minister said in a
response to a question on the metals export duty. He stopped
short of saying a proposed levy had been abandoned altogether.

Kazakhstan’s economy, the largest in Central Asia, has grown
by an average 9 percent a year over the last decade, largely due
to exports of oil and metals. The country is the world’s largest
uranium miner and a major producer of copper, chrome and zinc.

It abolished an export duty on oil in January 2009 to help
producers ride out low crude prices during the global financial
crisis. Even at $40 per tonne, the duty is only a fifth of the
level applied before the tax was scrapped.

But analysts have compared the reintroduction of the duty to
efforts by Russia and other resource-rich nations to become more
assertive with investors as oil prices recover.

At just below $74 a barrel, U.S. crude (CLc1: ) is about 60
percent more expensive than it was when the duty was scrapped.

Zhamishev said Kazakhstan would earn about $2.9 billion from
the oil export tax next year.

He said Tengizchevroil, the Chevron-led (CVX.N: ) consortium
that is Kazakhstan’s biggest oil producer, was paying the export
duty and that any firm operating under a production sharing
agreement was obliged to contribute.

Other producers will also be affected. Troika Dialog
brokerage cut its 2011 net income forecast for London-traded
KazMunaiGas Exploration & Production (KMGq.L: ) by 6 percent.

“The move adds another layer of uncertainty for investors
who are trying to model Kazakh oil companies’ earnings,” Troika
analysts said in a note.


Zhamishev said he forecast Kazakhstan’s 2011 budget deficit
at 2.8 percent of gross domestic product (GDP), compared with an
estimated 4.1 percent this year.

Budget revenues were set to rise by 20 percent next year,
the minister said, to about 4.1 trillion tenge ($27.5 billion).

Zhamishev also said the government planned to raise personal
income tax from a flat 10 percent. Those earning between 250,000
and 500,000 tenge ($1,700-$3,400) per month would be subject to
a 15 percent rate, and those above 500,000 tenge to 20 percent.
Zhamishev said he expected Kazakhstan to revise its GDP
growth forecast for 2010 upward to 5.0 percent, from the current
official forecast of 4.0 percent. The economy grew 8.0 percent
in the first six months of 2010. [ID:nLDE67U011]
At 3.1 percent, economic growth would be slower next year
than this, Economy Minister Zhanar Aitzhanova told the meeting,
before picking up again to 3.3 percent in 2012 and 3.5 percent
in 2013. In 2009, Kazakhstan’s economy grew 1.2 percent.

“The completion of industrial projects and an increase in
demand for the products that Kazakhstan exports will facilitate
industrial production growth of 3.6 percent in 2011 and 3.9
percent in 2012 and 2013,” Aitzhanova said.

She also forecast inflation next year would stay within the
corridor of 6.0 percent to 8.0 percent estimated in 2010.

Kazakhstan’s latest macroeconomic forecasts were based on an
average crude oil price of $65 per barrel between 2011 and 2015.
(Additional reporting and writing by Robin Paxton; editing by
Keiron Henderson)

UPDATE 1-Kazakhstan to double oil duty, metals may escape