Sep 16, 2020
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The Ministry of Finance of the Russian Federation wants to raise excise taxes on tobacco products by 20% in 2021

The Russian Ministry of Finance has prepared a draft amendment to the Tax Code, according to which excise rates on cigarettes, tobacco products and e-cigarettes should increase by 20% in 2021 to compensate for the increase in budget spending due to the pandemic.

Thus, in 2021, the excise tax rate on cigarettes may be 2,359 rubles per thousand pieces, on vapes and electronic cigarettes - 60 rubles per piece. At the moment, the excise tax on cigarettes for 2021 is set at 2,045 rubles per thousand pieces + 14.5% of the estimated cost, calculated relative to the maximum retail price, but not less than 2,778 rubles. On electronic devices for 52 rubles apiece, which is 4% higher than the rates of 2020, transfers RBC.

In subsequent years, the excise rate will be indexed, as planned, in a standard manner, taking into account the level of projected inflation.

An unscheduled increase in excise taxes will make it possible to ensure the fulfillment of social obligations of the state in the face of an increase in budget spending due to the current economic situation associated with the spread of the pandemic, - said the representative of the department.

According to experts interviewed by the publication, the proposed increase will lead to an increase in the weighted average price of a pack of cigarettes for consumers to 140 rubles, or, on average, at least 20 rubles per pack. It is also noted that 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.

Also, experts say, an increase in excise taxes can provoke an increase in the share of counterfeit and smuggling up to 30%, and the losses of the federal budget due to the illegal market, which, according to experts, this year may amount to 100 billion rubles, will multiply.

As wrote earlier, the state duty for licensing the retail sale of alcohol can be reduced by five times. Such a proposal was made by the Ministry of Industry and Trade. The department considers it necessary to reduce the size of the state duty to one thousand rubles a month. The current duty is 65 thousand rubles per year.

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