Lithuanian PM defends tax exemption on shale gas extraction

Algirdas Butkevičius
DELFI / Šarūnas Mažeika

According to Butkevičius, tax exemption would help reduce gas price, hence the end user would benefit.

“We should view this in a wider context. The gas that is extracted does not evaporate in the air, it is sold, someone buys that gas, and someone processes into electricity or heat that someone else uses. If gas price decreases, then competitive conditions for businesses are facilitated. We must see the broader picture, on the economic level,” the prime minister told the national radio.

As reported, on 17 September the Government approved the amendments to the Law on Tax on Petroleum and Natural Gas Resources. The amendments stipulate that companies exploring for shale gas would be relieved for 3 years from the tax on shale extraction. After the three-year-period they would have to pay a fixed 15 percent tax. The law also stipulates that 10 percent from this revenue would be distributed to budgets of those municipalities where shale gas extraction takes place.

The Competition Council is currently asserting if the proposed tax exemption does not contravene the European Union legislation. Butkevičius is sure that the council’s conclusion will be affirmative.

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