The Russian Tax Ministry increased its 2001 back tax bill against the oil giant Yukos to US$4.1 billion on Friday, bringing its total tax claims against the company to US$7.5 billion.
The revised bill raises by US$700 million the government's previous US$3.4 billion estimate of back taxes for 2001. The ministry says Yukos evaded taxes through the use of onshore tax havens.
Yukos, which produces 2 percent of the world's oil, said it would continue to fight the 2001 back tax claim. Yukos has already been assessed a US$3.4 billion back tax bill for the year 2000 and has paid US$2 billion of that so far.
The oil producer has repeatedly said the tax avoidance methods it used were legal and widely used at the time. Many Russian oil companies used such tax havens aggressively, and industry analysts have said that Yukos is being singled out as part of a larger Kremlin-inspired campaign against the company and its founder, Mikhail Khodorkovsky. He is in jail and is being tried for tax evasion, fraud and embezzlement.
The tax ministry said in a statement on Friday that Yukos made "fictitious" arrangements to trade its oil through companies incorporated in remote regions of Russia where taxes were low. Analysts say the government will probably continue its audit of Yukos, and that the ultimate tax bill for 2000 to 2003 could total US$10 billion or more.
The steeper tax claim comes just one day after Yukos reported that a court upheld a ruling freezing accounts at the two largest of its three subsidiaries. The company said the maneuver could bring its operations to a halt.
Attempts by the Russian government to collect on these large tax bills have raised concerns that the company could go bankrupt, and helped push oil prices to record highs in August.
Yukos has repeatedly warned that the huge bills could cause it to reduce oil production. But so far, Yukos' output appears to be steady despite its tangle with the authorities. Yukos' production rose 8.5 percent in the first eight months of this year from the same period last year, to an average of 1.74 million barrels a day in August, the Energy and Industry Ministry said this week.
The Yukos developments were overshadowed by a violent hostage crisis at a school in North Ossetia, which ended in a chaotic, apparently unplanned raid on the school, with hundreds injured and scores dead.
"Everybody is just distracted watching the TV, and the Yukos development today is just more of the same," said Christopher Weafer, chief strategist at Alfa Capital. He added, however, that Russia is still dependent on oil, and increased risk of terrorism could derail reforms in Russia if hardliners in the government strengthen their position.
"That could prevent Russian President Vladimir Putin from focusing on the economy, and instead more on the war on terror," Weafer said.
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