According to the Tax Code, next year the excise tax on tobacco should be increased by 4%. The Ministry of Finance proposes to raise the rate by 20% at once to compensate for the costs due to the COVID-19 pandemic. Thus, the department expects to receive additional budget revenues in the amount of 70 billion rubles. This year, the deficit of the Russian budget, according to the forecast of the Ministry of Finance, will be 4.4%, but by 2022 the deficit is planned to be reduced to 1%.
If the excise tax on tobacco is increased by 20%, a pack of cigarettes will rise in price by about 17%.
“This will cost about 20 rubles per pack, if you look at the cost of cigarettes in the amount of about 120 rubles,” he quotes Minister of Finance Anton Siluanov RIA News. Thus, the cost of a pack of cigarettes next year may rise to 140 rubles.
Information about the amendments to the Tax Code, suggesting an increase in excise taxes by 20% on tobacco products, cigarettes and electronic cigarettes, appeared in the media the day before. Later Prime Minister Mikhail Mishustin confirmed the government’s plans to raise tobacco excise rates above inflation.
These are not all tax innovations planned by the Cabinet. Thus, the government is considering the possibility of raising the mineral extraction tax (MET) and revising the benefits in the oil and gas sector.
“Here are just some of our proposals: we are slightly increasing the taxation of a number of profitable industries, for this purpose we are modifying the parameters of the tax on additional income in the production of hydrocarbons, we propose to revise the parameters of a number of benefits in the oil and gas sector, tobacco products are higher than inflation, ”the Prime Minister said at a government meeting.