Sep 16, 2020
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Mishustin announced plans to increase excise taxes on tobacco

At a government meeting, Russian Prime Minister Mikhail Mishustin announced plans to increase a number of taxes, including excise taxes on tobacco. Earlier it became known that the Ministry of Finance has prepared a draft amendment to the Tax Code, according to which in 2021 the excise tax rates on tobacco products will increase by 20%.

We are slightly increasing taxation in a number of lucrative industries. Let's modify the parameters of the tax regime on additional income in the production of hydrocarbons. We propose to increase the payment for the use of natural resources, to index the rates of excise taxes on tobacco products above inflation- said Mishustin during the meeting, the broadcast of which led TV channel "Russia 24".

The prime minister argued this decision with a difficult situation in which "everyone should take part in solving the problems facing the country and the people."

As wrote, in 2021 the excise tax rate for cigarettes could be 2359 rubles per thousand pieces, for vapes and electronic cigarettes - 60 rubles per piece. At the moment, the excise tax on cigarettes for 2021 is set at 2045 rubles per thousand pieces + 14.5% of the estimated cost, calculated relative to the maximum retail price, but not less than 2778 rubles. For electronic devices - 52 rubles apiece, which is 4% higher than the rates of 2020. According to experts, the proposed increase will lead to an increase in the weighted average price of a pack of cigarettes for consumers to RUB 140, or an average of RUB 20 per pack. In absolute terms, this will be the largest increase in the excise tax on cigarettes in the entire history of the tobacco industry in Russia.

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