Russia Offers Investors Tax Breaks for Nine Arctic Projects Worth $235bn

New tax benefits for investors in the Arctic will favor the implementation of nine major projects worth 15 trillion rubles ($235 billion), a government official has said, according to High North News.

The news was announced by Russia’s Deputy Minister for Development of the Far East and Arctic Alexander Krutikov, who addressed a forum dubbed Arctic 2020 on Wednesday.

Earlier, Russian legislators supported amendments to the Tax Code, introducing benefits for investors in new projects in the Arctic. Quite a number of preferential terms will be offered to mining companies.

“According to estimations by the Ministry of Energy, those tax benefits alone will favor launching nine big economic projects in the Arctic, worth 15 trillion rubles in investments,” the deputy minister said, without naming the projects.

The proposed changes include a residential status to Arctic businesses, investing at least 10 million rubles ($156,000) in new projects. The status means certain tax and non-tax benefits, including optional free customs zones, simplified procedure of obtaining land, curtailed inspections, and protection in court.

The 5th international conference Arctic 2020 is underway in Moscow through February 20.

The proposed investor-focused benefits are intended to address the issues of under-population and other human development issues, says the newly appointed head of the Ministry for Development of the Russian Far East and Arctic Alexander Kozlov. He argues that the way to halt the depopulation of the Russian Arctic is to encourage job creation through tax incentives for employers.

The initiative is intended to create several hundred thousand jobs in the Russian North. Despite lost tax revenue, it is said that the tax deduction will have a positive effect on the budget system from the additional created business. According to the committee, the aggregate benefit for the Russian budget will amount to 1.9 trillion rubles ($29.8 billion).

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