The Ministry of Finance proposed to adjust the parameters for the excise tax on sugary drinks: it was decided not to extend it to drinks with a reduced sugar content, but the rate will increase next year. This follows from the text of the draft amendments to the second part of the Tax Code developed by the Ministry of Finance. The document was submitted to the legislative commission on Monday, October 14, a source familiar with the agenda of the meeting said.
The fact that the Ministry of Finance proposed to improve the approach to paying excise duty on sugar-containing beverages following discussions with industry departments and businesses was confirmed by RBC through a representative of the State Secretary — Deputy Finance Minister Alexey Sazanov.
The excise tax on sugar-containing beverages was introduced in Russia on July 1, 2023. Now, according to the law, a tax of 7 rubles per 1 liter is paid on soft drinks that contain sugar (glucose, fructose, sucrose, dextrose, maltose, lactose), syrup with sugar or honey if the amount of carbohydrates in their nutritional value is more than 5 g per 100 ml. At the same time, the volume fraction of ethyl alcohol in such drinks should not exceed 1.2%.
At the end of September, the Budget and Taxes Committee submitted to the State Duma a bill amending the Tax Code, which proposed to change the criterion for the content of added sugars and carbohydrates for excisable drinks, setting their amount at 2 g per 100 ml of drink (instead of 5 g). The press service of the Ministry of Finance previously explained to RBC that this is necessary to reduce excessive consumption of sugary drinks and "stop manipulations related to the payment of excise duty." "Manufacturers, trying to avoid paying excise taxes, underestimated the amount of sugar in the drink," the representative of the ministry pointed out. Reviews and comments on this document, which is scheduled for consideration on October 17, were accepted until October 14, according to the bill card.
In the new version of the amendments prepared by the Ministry of Finance, there is no proposal to change the criterion for the amount of carbohydrates in sugar-containing beverages subject to excise duty. But on the other hand, from January 1, 2025, it is proposed to increase the excise tax on sugar—containing beverages to 10 rubles per 1 liter, and also recognize kvass with an alcohol content of up to 1.2% as a sugar-containing drink.
The practice of paying excise tax on sugary drinks, which was introduced in mid-2023 to reduce sugar consumption by the population, revealed the need to clarify its parameters, explained RBC Sazanov. "On the one hand, we had a task to close loopholes for non-payment of excise duty. And on the other hand, to ensure a planned level of income to finance, among other things, state policy measures to combat diabetes," says the deputy head of the Ministry of Finance.
The initial version of the amendments to the Tax Code provided for reducing the criterion for the amount of carbohydrates from 5 to 2 g per 100 ml to recognize the drink as excisable, and the exception for enriched products was also canceled, the Ministry of Finance recalled.
"Following consultations with business, as well as with the Ministry of Agriculture and the Ministry of Health, we have finalized the design of excise taxation of sugary drinks. It is proposed to keep the current criterion for the amount of carbohydrates over 5 g per 100 ml unchanged, while increasing the excise tax rate from 7 to 10 rubles. And also, in addition to enriched products, exceptions for kvass are canceled," Sazanov said. Increasing the excise tax rate instead of changing the criterion for the level of carbohydrates, according to the industry, will achieve a greater effect in achieving the goal of reducing sugar consumption by the population and financing measures to combat diabetes, the deputy minister added.
"This is a balanced compromise solution that takes into account the interests of both the industry, for which more preferable fiscal parameters have been proposed, and the state, which will receive the planned level of income to finance measures in the field of healthcare," Sazanov concluded.
The Union of Juice, Water and Beverage Producers (Soyuznapitki) asked in October to maintain the existing excise tax mechanism for sugar-containing beverages. The change automatically equalizes low—sugar products with full-sugar products - this, as the union warned, "may lead to the loss of the positive effect of the excise tax." Consumers are unlikely to quickly switch to unsweetened alternatives, and buyers may return to full—sugar products, and production volumes may decrease, Maxim Novikov, president of Soyuznapitkov, explained to Kommersant.
In 2023, the tax, which was earned on July 1 (for small and medium—sized businesses - from October 1), brought 8.3 billion rubles to the budget, the press service of the Ministry of Finance reported earlier. Of these, 7.2 billion rubles were brought in by revenues from sugar—containing beverages that were produced in Russia, and another 1.1 billion rubles were drinks that were imported into the country from abroad. More than a third of all excise tax revenues — 3.1 billion rubles — were paid by the former Coca-Cola manufacturer in Russia, the company "Multon Partners", which now produces sweet soda and other drinks under the brand "Dobry".
In 2024, revenues from the excise tax on sugar-containing beverages are expected to amount to 17.7 billion rubles, according to the explanatory note to the draft budget of Russia for 2025-2027. But in subsequent years, budget revenues from this tax are expected to be slightly less: for 2025 and 2026, these are 16.7 and 16.6 billion rubles, respectively.
The press service of the Ministry of Finance clarified to RBC that revenues from the excise tax on sweet soda in 2024 will even exceed expectations: as of October 1, 16.2 billion rubles were collected, and total revenues for the whole year will amount to about 20 billion rubles. They also provided adjusted revenue forecasts for the next three years: in 2025 it will be 18.8 billion rubles, in 2026 — 18.7 billion rubles, and in 2027 — 19 billion rubles.
The ministry explained the decrease in projected revenues in future years by a reduction in the production of excisable sugar-containing beverages and an increase in the production of products not subject to excise duty. The Ministry of Finance recalled that "sugar-containing beverages have a negative impact on the health of not only adults, but also children," and the excise tax was introduced as part of the general state policy to combat diabetes mellitus. The proceeds from the tax are directed, among other things, to the development of healthcare, the representative of the ministry added. About 30 billion rubles are provided for measures to combat diabetes mellitus in the draft budget for 2025-2027.
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