The expert questioned the validity of the budget

#industry news

Deputy Chairman of the Government of the Orenburg region, co-chairman of the State Duma Expert Council on the development of competition in the markets of nicotine-containing products, issues of state regulation of relations in the production and turnover of tobacco and innovative nicotine-containing products Sergey Katasonov called the forecasts for the revenue side of the budget-2023 quite bold. In particular, he considers the idea of getting an additional 100 billion rubles to the treasury next year from improving the collection of tobacco excise taxes to be very optimistic.

According to him, in the initial budget guidelines there was a clause on increasing revenues by 100 billion rubles over three years, which seems to be a more achievable goal, provided a consistent systematic fight against the black tobacco market, the damage from which for the treasury is estimated at 113 billion rubles in 2022 with the share of illegal tobacco turnover at 12.1 percent (1.3 billion packs) of which - 88 billion rubles of uncollected excise taxes and 25 billion rubles of uncollected VAT.

"12 percent of the illegal market today is the results that we have not achieved with the introduction of digital marking and other measures to "whitewash" the market. And due to what the volume of the illegal market will decrease further? We have not introduced tougher criminal liability, we have not fully harmonized excise taxes with the EAEU and, in particular, with Belarus," Katasonov said.

Earlier, the head of the Accounts Chamber Alexei Kudrin, speaking in the State Duma, also noted that the budget provides "optimistic estimates of income" that "require additional attention." The Accounts Chamber, in its conclusion on the draft federal budget, notes that there are no calculation algorithms for 19 types of income in the materials, the forecast for which for 2023 is 832.4 billion rubles, or 3.19 percent of the total projected amount of income, in 2024 — 1101.3 billion rubles, or 4.04 percent, and in 2025 — 1066.5 billion rubles, or 3.81 percent.

Vladislav Zaslavsky, Deputy director of the Department of digital marking of goods and legalization of product turnover of the Ministry of Industry and Trade of Russia, says that "we need to soberly assess the situation."

According to him, "it would be more correct to consistently set ourselves a KPI to reduce illicit tobacco trafficking, it cannot be that it falls to zero in a year. In any country in the world, the share of illicit tobacco trafficking is not zero, crime will find loopholes." In addition, Zaslavsky adds that the harmonization of excise taxes with the EAEU has not yet been completed.

"We have not yet created all the conditions to completely reset tobacco trafficking," the official said.

He added that one of the tools in the fight against the illegal market could be the redistribution of excise taxes from the federal budget to the regions as a stimulating measure for the subjects of the Federation to intensify the fight against illegal cigarette trafficking. Under these conditions, it is possible to significantly improve the collection of excise taxes due to more thorough and consistent regulation of the fast-growing market of electronic cigarettes, where now, according to experts, the share of the "black" market exceeds 90 percent.

"Today, 95-98 percent of illegal products are on the market of electronic nicotine delivery systems. According to our estimates, the total direct losses of the Russian budget from the black market of electronic cigarettes are estimated at 50-60 billion rubles per year. The fact is that the excise tax on liquid for electronic nicotine delivery systems in Russia today is the largest in the world. If we do not make an economically reasonable tariff, we will never block the flow of illegal imports," Katasonov is sure.

He believes that it is necessary to harmonize the excise tax rate in the CIS and set it within 5-7 rubles per milliliter, then within two years the market will be "rebuilt" and "it will be possible to talk about increasing the collection of excise taxes." If this is done, then, according to him, excise taxes on electronic nicotine delivery systems will bring about 25 billion rubles to the budget within a year after these measures are taken.