Yukos may get tax bill extension

The Russian government has said it may give embattled oil giant Yukos more time to pay a $3.4bn tax bill.
Yukos, which was originally given until Wednesday night to pay the arrears run up in 2000, had said it may be forced into bankruptcy as a result.

Russia's deputy finance minister Sergei Shatalov said Yukos may get more time to pay if it makes a formal request.

But another Russian official said Yukos could still face additional tax bills for the years 2002 and 2003.

Following Mr Shatalov's comments Yukos' share price rose by as much as 23%, only to fall back again - to be up 6% on the day - following the cautionary words on possible future tax bills by Prosecutor-General Vladimir Ustinov.

Misused

Some analysts said Mr Shatalov's words should still be taken as a positive, as even if Yukos does face additional tax bills Russian authorities may now be more flexible about giving the company extra time to pay up.

"The [Shatalov] comment means that Yukos would probably not be required to pay all at once," said Konstantin Shapsharov, a trader at Alfa Bank. "Talks are possible."

Yukos' current $3.4bn tax bill applies to 2000, when Russian authorities claim it misused tax havens to reduce its tax burden.

The oil giant - which accounts for production of one in every five barrels of oil Russia produces - denies any wrongdoing, claiming instead that the practice was legal at the time.

The company has also received a tax demand for a similar amount for 2001.

It insists it cannot possibly pay the bills because Russian authorities have also frozen its assets.

Poltical punishment

Many analysts say Yukos' taxation woes are part of a politically orchestrated campaign against the company by the Kremlin.

They say it is punishment for the political aspirations of Yukos' former chief executive Mikhail Khodorkovsky.

One of Russia's richest men, Mr Khodorkovsky was arrested and imprisoned last autumn on charges of fraud, tax evasion and embezzlement.

Before his arrest and the start of investigations into Yukos' taxation, he had begun to fund some of President Putin's political opponents.

Mr Khodorkovsky is still in prison awaiting the re-opening of his trial on 12 July.

President Putin has pledged not to destroy Yukos, but many analysts say the company's current woes can only be putting off potential foreign investors.

Last week Yukos was declared in default of a $1bn foreign loan.


HERE