On the first of January of this year in Russia, the taxes on an impressive list of goods increased, in particular this affected alcohol, cigarettes and even gasoline. The upcoming tax increase entailed changes in laws on amendments to the country's Tax Code, which the State Duma approved in the third reading at the end of November last year.
Budget replenishment
According to preliminary estimates, the growth of excise taxes will certainly bring an additional 430 billion rubles in 2017 to the federal budget, in 2018 this figure will already be 345, and in 2019 it will grow to 487. As a result, more than one trillion will be obtained. So, what is the expected price for everyone’s favorite champagne and wine, how the excise tax on tobacco will change, and how innovations will affect gas tariffs, we will discuss this below.
Metamorphoses with alcohol
The government does not consider it necessary to reduce the level of excise taxes on alcohol. At the beginning of the year, excise taxes on champagne, which was made from imported products, reached 36 rubles per liter. Initially, they were planning to increase the level of tax rates on products manufactured domestically, but as a result, this idea was rejected by law. The rate on champagne from domestic grapes grew by only one ruble, although during the development of amendments to the legislation of the tax code it was assumed that this figure would reach 14 rubles. The excise tax on tobacco is discussed below.
Excises on popular foreign wines were raised from nine to 18 rubles per liter, and for wines from Russian products the rate was kept at a low level of five rubles.
As expected, there have been changes in the growth of excise taxes and on strong alcoholic beverages. We are talking about those where the direct proportion of alcohol is more than nine percent. The rate of anhydrous alcohol increased from the previous 500 to 523 rubles, and alcohol with an average indicator of the content of the heating concentrate (up to nine percent) increased in value by eighteen points. Constant increase in excise taxes on tobacco.
From the very beginning of the year, experts have stated that the increase in prices in stores will certainly be several times higher than the increase in excise taxes. The FIGURE, which stands for “Center for Research on the Federal and Regional Alcohol Markets, suggests that with the process of starting the price increase launched, the most affordable bottle of wine will soon go up by 120 rubles. The minimum cost of champagne will increase not by such a cardinal amount as wine, but only by 19 rubles. As for a bottle of vodka, it will be sold in the future no cheaper than for 230 rubles.
How will prices increase?
Rises in price will not occur sharply and instantly. This is a long-playing process, designed for a sufficiently long period of time. Usually, new prices reach their consumers by the time that stage when manufacturers completely end their previous products. In January of this year, retailers, as expected, went to lower prices: incredible demand allowed them to sell a huge amount of strong drinks and champagne in a month and a half, which can be compared with revenue for the whole year. The excise tax on tobacco has grown even more.
It is noteworthy that at the end of September last year, the Ministry of Industry and Trade of the Russian Federation shared this idea: it is desirable to reduce the lowest retail price of vodka in the country to ninety rubles per bottle. A number of experts eagerly supported this initiative and made an estimated forecast that such measures could undermine the activities of counterfeit traders.
But it was not there.Already in mid-December, Rospotrebnadzor made a statement that the reduction of the minimum retail price for alcoholic beverages should in no case be allowed, as this could prompt Russian citizens to consume even more alcoholic beverages. The lack of plans to lower excise taxes on alcohol was also approved by the government. Thus, Deputy Prime Minister Alexander Khloponin emphasized that such a product is contraindicated to make publicly available.
The excise tax on alcohol and tobacco is of interest to many.
Excise tax on cigarettes
So, tobacco relates to excisable tobacco products:
- pipe (has the form of a thin cigar);
- chewing;
- smoking;
- snuff;
- sucking;
- nasvay;
- for use in hookahs;
- for cigarettes with and without filter;
- cigarette.
Of course, when considering the issue of alcohol, Russian lawmakers did not ignore tobacco products. In the current 2017, the level of excise tax rates on cigarettes amounted to 1,562 rubles per one thousand units plus fifteen percent. In the coming 2018 and 2019, numbers are expected to rise higher. Prices for the entire list of tobacco will increase, the same applies to the heated product. Excise taxes will also include electronic cigarettes or, as they are also called, “vapes”, and we are talking about both the devices themselves and the liquids for refueling these substitutes. Many people wonder how to get excise tax on tobacco.
How to get it?
The tobacco producer (individual entrepreneur or legal entity) needs to contact the local tax office to obtain excise stamps.
For this, it is provided:
- application in the prescribed form;
- report on the use of excise stamps.
These documents are stamped and signed by the applicant. Documents are registered by tax officials. Consider them no more than three working days.
What are the calculations talking about?
The Ministry of Internal Affairs of the Russian Federation recently calculated that given the increase in the level of excise taxes this year, the average price per pack of cigarettes will reach about 220 rubles.
In the budget committee of the Council of the Federation, such calculations by the Ministry of the Interior were quick to cast doubt and doubt. According to the head of the committee, Sergei Ryabukhin, with an increase in excise taxes on tobacco by about 26% in 2017, one such pack of cigarettes will become more expensive by about eleven percent, which means ten or even twelve rubles. The Ministry of Finance more accurately indicated these figures and announced that the average retail price of one pack of cigarettes should grow by ten percent, and by 2019 by as much as 27%.
The excise tax on tobacco for hookah is also becoming more expensive.
Anti-smoking
The World Health Organization reminds us that raising the price of cigarettes is the most effective and efficient way to deal with the widespread problem of smoking among our citizens. Health workers once again emphasize that if such measures are taken, the effect and result will be much better than all kinds of anti-tobacco campaigns, as well as the prohibition of smoking in public places.
As for the experts interviewed on the essence of this issue, they believe that the cost of one cigarette pack can exceed one hundred rubles, and on average in the Russian market it will amount to 113-115 rubles. Citizens of the Russian Federation have already felt a rise in prices in connection with the introduction of excise taxes and, indeed, as expected, this year has become one of the most sensitive in the history of the issue of prices for tobacco and alcohol.
Excise tax on hookah tobacco
Excise duty is an indirect tax that is included in the price of a product. This tax applies to all tobacco products, including tobacco for hookah. All tobacco products when sold within the Russian Federation must be noted with excise stamps.
How much is it?
The government of Russia annually increases excise taxes.Since 2017, there has been an increase in the excise rate for all types of tobacco, including hookah. In subsequent years, an increase is also expected:
2017 - for 1 kg of tobacco up to 2500 rubles;
2018 - 2,700 rubles .;
2019 - 3,000 rubles.
Alcohol, tobacco, and now also gasoline
Rising rates continues to go by leaps and bounds. Experts predict that in 2018, he will touch on fifth-class motor gasoline. It is expected that this will increase from the current 10,130 rubles per ton to 10,535, and after a year and a half, that is, already in 2019, this figure will increase to 10,957 rubles.
In addition to raising excise taxes on tobacco, Russian producers increased gas prices by four percent last fall. And in 2017, deputies set the rate on diesel fuel at 6800 rubles. This figure is expected to grow to seven thousand next year and to seven and a half in 2019. Six months ago, it was only five thousand. The Ministry of Finance of the Russian Federation previously assured that fifth-category automobile fuel should rise in price insignificantly, and as a result, this little-predicted figure resulted in a noticeable increase of almost two rubles.
According to the head of the Ministry of Energy of the Russian Federation, Alexander Novak, the increase in fuel prices in 2018 will not be higher than the inflation limits. The Central Bank’s target for the coming year is four percent. The head of the Federal Antimonopoly Service, Igor Artemyev, believes that the increase in gas prices as part of inflation will continue for the next ten years.
According to the words, in the next ten years, Russian consumers will not face any serious increases in the cost of oil products. He believes that they, as before, will remain at the level of inflation, or even slightly below it.
Forecasts
Forecasts of the Russian Fuel Union predict gasoline price increases. They attribute this to sanctions and other all sorts of factors that push this value to creep up. Employees of the industry association are optimistic about the authorities' ability to hold retail prices in every possible way.
President of the Russian Fuel Union Yevgeny Arkusha explained that the cost of petroleum products has increased, and customs duties should decrease next year. This suggests that export parity should increase, as a result of which domestic prices will creep up, because for oil companies an equal role is played by equal profitability in fuel supplies, both to the foreign market and to the domestic one.