Russian State Duma Budget Committee Supports Digital Labeling Bill, Tobacco Products to Use New Mark

The Russian State Duma Budget Committee has supported a tax bill on digital labeling for tobacco and nicotine products. The measure will be implemented starting at the end of 2023, and the procedures for administering excise taxes will change after the switch to digital labeling. Tobacco products will use barcodes instead of paper labels, along with counting identification marks.

According to a January 22 report by Interfax.ru, the Russian State Duma Budget Committee supported a bill amending the tax code to regulate the procedures for levying and administering excise taxes after tobacco and nicotine-containing products transition to digital labeling. Bill No. 512729-8 was submitted to parliament by the government in December 2023.

Deputy Finance Minister Alexey Sazanov said at the committee meeting that the reason for drafting the bill is that, beginning March 1, 2024, the marking requirements for tobacco and nicotine-containing products will change. “We will abandon paper labels and switch to digital labeling,” he said.

The bill sets out the procedure for collecting excise tax and establishes the order for excise tax administration after the transition to digital labeling. It introduces the term “calculated control special marking,” which in practice refers to the barcode that will be affixed to the packaging.

He noted: “Certain control requirements are being clarified—the tax base cannot be lower than the corresponding production volume already recorded in the state information system, whether for tobacco or nicotine-containing products.”

Lawmakers were concerned about how the digital label on tobacco products would appear. The deputy finance minister assured them: “The physical excise tax stamp will be replaced by a barcode, just like those used on pharmaceutical and dairy packaging, and there will be an identifying counting mark.”