The tobacco market in Russia is not regulated enough — it needs a control system to whitewash it, as in the alcohol market, the head of the Ministry of Finance says. The current tobacco marking is more effective than the alcoholic EGAIS, the CRPT believes.
In order to whitewash the tobacco industry, in which there are still many gray areas, a system of full market traceability is needed, following the example of the one that operates for the alcohol market, Finance Minister Anton Siluanov said in an interview with RBC.
The Ministry of Finance, "like no other, is interested in restoring order" in the tobacco market, since "this is money for the budget," the minister noted. "Tobacco turnover is an area where there are still many nontransparet zones, including gray imports from neighboring countries. We collect many times more excise taxes on tobacco than excise taxes on alcohol, and there are fewer control opportunities," Siluanov complained.
The traceability system, control over the production and movement of products and responsibility for violations for tobacco products should be the same as for alcoholic beverages, where full traceability is provided by the Unified state Automated Information System of accounting of production volume and turnover of ethyl alcohol, alcoholic and alcohol-containing products (EGAIS), the minister believes.
"Everything is different in tobacco. And there is no proper responsibility for violations. There is a brand, but there is no sense," Siluanov stated.
In the tobacco industry, "effective control mechanisms" are almost absent due to the fact that the industry is overseen by several regulators (among them the Ministry of Agriculture, the Ministry of Health, the Ministry of Internal Affairs, Rospotrebnadzor, the Federal Tax Service and the Federal Customs Service), and the regulatory and legal regulation is fragmented - this leads to an increase in the production and turnover of illegal products, the Ministry of Finance noted.
What systems control the turnover of alcohol and tobacco
EGAIS controls the production of alcoholic beverages in Russia and their import, as well as retail sales. Since January 1, 2016, retail stores in Russia have been transmitting to the EGAIS information on wholesale purchases of any alcohol, and since July 1, 2016 — on retail sales (excluding beer).
Since 2019, data matrix barcodes of the National "CHESTNY ZNAK" marking system have been applied to tobacco products, which should ensure traceability of the turnover of tobacco products produced in Russia and imported into the country to the final consumer. Mandatory marking is applied to cigarettes and cigarettes from July 1, 2019, and from July 1, 2020, it has been introduced for alternative tobacco (cigars, cigarillos, smoking and snuff, as well as hookah tobacco). Since March 1, 2022, mandatory marking has also been introduced for sticks for heating systems and tobacco-free smoking mixtures for hookah.
The Finance Minister recalled that the Ministry has submitted to the government a number of legislative initiatives aimed at tightening control over the tobacco market. In June, the Ministry of Finance presented a draft of a separate sectoral law developed by it to regulate the production and turnover of tobacco. The document provides for the introduction of licensing for the production and import of tobacco, nicotine-containing products and raw materials for their production, and also obliges manufacturers to register the main equipment for their production. The bill provides that state control over the production and turnover of goods on the tobacco market will be based on the "CHESTNY ZNAK" label and taken into account in its system.
Siluanov expressed hope that the proposed bill will be submitted to the State Duma and adopted this year. The tightening of regulation and whitewashing of the tobacco market by increasing the collection rate and improving the administration of excise taxes, according to the Ministry of Finance, may bring additional revenues in the amount of 100 billion rubles to the budget in 2023.
The proposal to regulate the tobacco industry under the EGAIS system is not new: in 2021, the Ministry of Finance took the initiative to introduce licenses for the production and wholesale of tobacco and transfer data to the modified EGAIS system. But not all market participants supported the proposal to include tobacco products in the scope of the EGAIS system. Given the marking introduced for the tobacco market, "some provisions of the draft law regarding the EGAIS system seem superfluous," said Sergey Slipchenko, Vice President for Corporate Affairs of Philip Morris International affiliated companies in Russia.
A representative of the Center for the Development of Advanced Technologies (CDAT), the operator of the Honest Sign system, told RBC that "the marking system is much more efficient than any other existing systems, as evidenced by the results of the work." Since its introduction, the level of counterfeiting in tobacco products has decreased by a quarter — from 15.6% in 2019 to 12.1% in 2021, 32 illegal productions have been identified and closed, another 18 tobacco factories have come out of the shadows and started working legally. And due to marking, in 2021, charges from excise taxes in the tobacco industry increased, according to the Federal Tax Service, by 121.6 billion rubles. (20.9%) — up to 705 billion rubles, added to the CDAT.
RBC sent requests to the government and the Ministry of Industry and Trade.
How much does the budget lose due to illegal cigarette trade
A year ago, the Accounting Chamber estimated that in five years — from 2016 to mid—2021 - the federal budget lost 295.6 billion rubles due to the illegal sale of tobacco products. The share of illegal tobacco over the same period, according to the independent international agency Kantar TNS Russia, increased almost tenfold — from 1.1 to 10.7%. Thus, every tenth pack of cigarettes in Russia was sold illegally, tax was not paid from it. In 2021, the budget lost 75.2 billion rubles due to illicit tobacco trafficking, and in the first half of 2022 - at least 38.7 billion rubles, estimated the national scientific competence center in the field of combating illicit trafficking in industrial products (ANPO "NCCR"). According to experts, the share of illegal products now accounts for 12.1% of the Russian tobacco market. Most illegal cigarettes are found in the border regions — the Novgorod and Bryansk regions. The largest share in illegal turnover is cigarettes illegally imported from neighboring countries of the Eurasian Economic Union (in addition to Russia, it includes Armenia, Belarus, Kazakhstan and Kyrgyzstan). Most illegal cigarettes come from Belarus: They account for 92% of tobacco counterfeit imported to Russia from the EAEU countries.
Source:
rbc.ru