The Union of Enterprises of the Nicotine-containing Products Industry (SPINI) proposes to calculate the excise tax rate on vapes according to a similar scheme with the excise tax on alcohol, which takes into account the proportion of ethyl alcohol, that is, depending on the proportion of nicotine. This approach will allow to receive additional revenues to the budget of the Russian Federation in the amount of 50 billion rubles in 2025 and more than 100 billion rubles in 2026, according to a press release from the union.
"The current excise tax rate is de facto prohibitive, and the amount of fees has been hovering near zero since the beginning of the year. This is because the proportion of nicotine in 1 milliliter of liquid is not taken into account. Since 2021, its maximum content has been reduced five times: from 10% to 2% per 100 mg, although the excise tax itself has increased 4.2 times since 2017 to 42 rubles per 1 milliliter of nicotine-containing liquid," said Vladimir Mishelovin, a member of the board of SPINI, quoted in a press release.
Thus, according to him, the effective rate has increased 21 times since the beginning of the excise tax, and 95-98% of the vaping market turned out to be in the gray zone. Today, Russia is many times ahead of any country in the world in terms of excise taxation of vapes, including the excise tax on them is several times higher than the internal excise rate on traditional cigarettes or heated tobacco, which, according to technical regulations, belongs to the same category as liquids for electronic nicotine delivery systems (ESDS), he noted.
According to SPINI, the cost of illegal products on the Russian market today is about 150 rubles, legal - 1,620 rubles, where 1,260 rubles is taken by excise duty and another 270 rubles are accounted for by VAT.
Recalculation of the excise tax rate, taking into account the legally established concentration of nicotine in the ESDN liquid, as well as international experience in excise regulation of tobacco and nicotine-containing products, will whitewash the vaping market by at least 85%, according to the union.
"According to our forecasts, this will result in up to 50 billion rubles of excise duties (excluding VAT and other taxes due to the whitewashing of the market) next year and more than 100 billion in 2026. In the context of state revenues, this will reduce the planned budget deficit by about 4.3% in 2025 and by 4.6% in 2026," Michelovin believes.
In addition, a significant whitewashing of the market will enable the state to control the prohibition of sales to minors and provide adult smokers with high-quality products.
According to SPINI's estimates, the Russian market consumes about 6.5 billion milliliters of ESDN liquid per year. According to VTSIOM data provided in a press release, the total number of adult vaping consumers is 10.5 million people, or 9% of the adult population of the country.
"We are talking about a significant part of the population who wants to have an alternative to smoking traditional cigarettes, to buy legal high-quality products. Instead, we see the demonization of vapes in the information field, which has nothing to do with legal products that help reduce the harm from smoking. Legal businesses comply with the law, including paying taxes, do not sell vapes to children, do not sell vapes that explode or contain toxic substances," Michelovin said.
As reported, in the spring of this year, a bill was submitted to the State Duma to ban the turnover of vapes in the Russian Federation, but it was sent for revision. Speaking at the Bioprom forum in early October this year, the head of the Ministry of Industry and Trade Anton Alikhanov said that the ban on the sale of vapes to minors in the Russian Federation does not work fully, which leads to widespread use of vapes among teenagers. One of the ways to overcome this, according to him, could be the introduction of a complete ban on the turnover of this type of product, following the example of some EAEU countries (Kazakhstan and Kyrgyzstan).
Source: