THE MAIN PROBLEM OF THE COUNTERFEIT TOBACCO MARKET IS ILLEGAL IMPORTATION AND HIGH EXCISE TAXES
Since March 1, new rules have been introduced in the Russian tobacco market: a license now is required for the production, storage, as well as for the import and export of tobacco products. The measures are being taken to combat counterfeiting in the cigarette market. However, the expert of tobacco industry Vadim Zhelnin believes that the law will not be effective and says: “The problem of the illegal market hasn’t occurred within Russia, but is caused by the transportation across the border. The big volume of illegal products is explained by too high excise taxes.”
The State Duma approved an increase in excise taxes on tobacco and wine and it is expected that this will bring 150 B Rubles (15.2 M Euro) to the budget over three years. The tobacco excise tax has increased by 8% since the beginning of 2023, while the initial increase of 5% has been revised. Experts predict that new measures and strict control over manufacturers will lead to an increase in product prices.
For the everyday operation of TKM International Consulting it is important to adapt for the consequences of the introduced changes. As until 2023 there was no particular law regulating the production and circulation of tobacco, the manufacturers will no longer be able to store tobacco products in warehouses and other premises if they are not in their ownership, or under their economic or operational control. Thus, the new fabrics are launching abroad near the borders of Russia, which requires us to control the import more intensively.
Source: https://www.kommersant.ru/doc/6535934