Russia Plans Tax Increases For Alcohol, Cigarettes -Vedomosti

9th Jun 2010 22:50

DOW JONES NEWSWIRES Russia's Finance Ministry has proposed big increases in excise taxes on liquor and cigarettes starting next year, business daily Vedomosti reports Thursday. The ministry would raise the tax on hard alcohol in 2011, 2012 and 2013, causing the price of a liter of the cheapest vodka to reach 150 rubles ($4.74), RUB215 and RUB280 from today's RUB89 ($2.81), the Center for Federal and Regional Alcohol Markets Research estimated. The levy on filtered cigarettes next year could be RUB360 ($11.39) per 1,000, up 44% from the current tax, according to ministry-proposed amendments to the tax code. Further increases of 28% are called for in 2012 and 2013, to RUB460 and RUB590, respectively. The new taxes, if approved by lawmakers, will represent the biggest increase in five years. For 2010 the excise tax was increased by 41%, for 2009 by 25%. The excise tax now accounts for up to 45.5% of the retail price of cigarettes, said Anatoly Vereshchagin, a Russia-based spokesman for Japan Tobacco International Inc.'s (2914.TO) international division. Next year's higher tax would lead to a price increase of RUB3 (9 cents) on a pack of less-expensive smokes while premium brands would go up RUB5, estimates Alexander Lyuty, a spokesman for British American Tobacco PLC's (BTI) BAT Russia. Newspaper website: www.vedomosti.ru -Dow Jones Newswires; 212-416-2900 (END) Dow Jones Newswires June 09, 2010 17:50 ET (21:50 GMT)