Russia to sharply increase tobacco excise tax

　　On October 16, Russian business consulting website reported that as a member of the World Health Organization's Framework Convention on Tobacco Control, Russia may increase tobacco excise taxes by nearly double, resulting in an average price of 216 rubles per pack of cigarettes.

　　Recently, representatives from 179 member countries of the WHO Framework Convention on Tobacco Control almost unanimously agreed to increase tobacco excise taxes in Moscow. According to WHO recommendations, 70% of the price of tobacco products should be excise tax. The Russian delegation agreed to this proposal, and it is now awaiting formal approval.

　　In Russia, the excise tax on a pack of cigarettes does not exceed 40% of its value. In 2013, the tobacco excise tax revenue in Russia's budget was approximately 200 billion rubles. Some countries—such as the UK, Bulgaria, Egypt, Cuba, Tunisia, and Brunei—have raised the excise tax rate to 70% of the price of a pack of cigarettes.

　　The Russian Consumer Association stated that this decision will accelerate the growth of excise taxes in the Russian Federation. This is particularly important under the conditions of national reductions in healthcare spending. Funds obtained through this channel can be used not only to combat smoking but also to increase the salaries of healthcare workers.

　　Additionally, Russian experts believe that tax policies should consider national interests and obligations, and most importantly, take into account residents' incomes. International experience shows that significantly raising prices while maintaining residents' income levels will lead to the development of illegal markets, weaken the legal industry, and result in a decline in budget tax revenues.

　　It is worth noting that if this decision takes effect, the average price of a pack of cigarettes will rise from 64 rubles to 216 rubles.