In most countries of the former Soviet Union, these taxes average less than 1 percent of GDP, but percentages are higher for Azerbaijan and the Baltics. There is considerable scope for increased taxation of consumption of petroleum products in all of these countries. This would bring prices almost up to Canadian levels but still below corresponding levels in Western European countries and the Czech Republic. Taxation of gas. Regulation and tax administration.
Regulations frequently discourage the cutting off of nonpaying energy customers.
Improved regulation and increased efficiency of tax administrations, as well as demonstration of sufficient political will to collect taxes from large producers, can increase revenues. The energy sector plays a very important role in Russia and other countries of the former Soviet Union. In addition, the budgetary contribution of the privatization of the energy sector has been very small, particularly in Russia. In the oil sector, low tax revenues result from infrastructure constraints on oil exports, weak tax administration, and inappropriate tax structures. Improvements in the fiscal regime for oil production, particularly in Russia, along with reform of oil transport, could boost foreign investment, enhance economic growth, and eventually contribute to higher tax revenues.