The adoption of a proposal to increase the excise tax rate on cigarettes worth more than 200 rubles by 30% may lead to the expansion of the black tobacco market in Russia, warns Sergey Katasonov, co-chairman of the expert council of the State Duma, which, in particular, deals with issues of state regulation of relations in the sphere of tobacco turnover.
"With such an increase in the excise tax, the price of a pack of cigarettes will increase by 15-20%, that is, it will become profitable to counterfeit and illegally import more expensive cigarettes. That is, in fact, the original idea of additional money to the budget will not be solved. And additional contraband and counterfeit products will come to this segment. There may be absolutely the opposite effect," Katasonov said.
Dean of the Faculty of Taxes, Audit and Business Analysis of the Financial University, Doctor of Economics Vadim Zasko also believes that a significant increase in excise rates will be an incentive to the spread of contraband tobacco products. At the same time, the expert is confident that the aggressive excise policy, combined with a certain lack of regulation of the indirect taxation system of the Customs Union countries, will form the prerequisites for squeezing the Russian cigarette manufacturer out of the market in favor of manufacturers of the CU countries. This, in turn, will lead to an increase in falling tax revenues to the consolidated budget of the Russian Federation, Zasko warned.
According to Vladlen Maksimov, the head of the Association of Small-format Trade, if the initiative under discussion is adopted, Russia will switch to a multi-level taxation system, which almost all countries have abandoned in the modern world. Such a system is still in operation in Sudan, Tanzania, Bangladesh and Myanmar.
According to market participants, the share of the premium segment of cigarettes, which officials have targeted, is insignificant and continues to decline from year to year. According to NielsenIQ, in 2023 it decreased to 22.9% of all cigarettes sold in the country.
"The initiative to establish an additional criterion for indexing excise taxes on cigarettes seems very controversial. Firstly, in absolute terms, due to the specifics of calculating excise taxes on cigarettes (using a combined rate: in rubles per piece plus a percentage of the maximum cost), the amount of excise taxes on expensive cigarettes is charged in a larger volume. Already this circumstance, according to some experts, is destructive from the point of view of public health, as it stimulates the demand for the consumption of low—quality tobacco products," Vadim Zasko is sure.
Earlier in August, information appeared about a proposal to amend the Tax Code of the Russian Federation regarding an increase in excise taxes on cigarettes and cigarettes, the cost of one pack of which exceeds 200 rubles, and an increase in the excise tax rate on cigars by 30%. According to media reports, the funds received due to the increase in excise taxes are supposed to be directed to the "fight against hepatitis C".
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