23 Sep 2009 16:48

Russian govt approves transport tax, higher excise taxes on alcohol, tobacco

MOSCOW. Sept 23 (Interfax) - The Russian government has approved a bill that would accelerate the increase in excise taxes for low-alcoholic beverages and tobacco products in 2010-2012 and also double transportation tax rates starting in 2010, Deputy Prime Minister and Finance Minister Alexei Kudrin said at a briefing on Wednesday.

The transportation tax is being increased to boost revenue for regional budgets.

It was reported earlier that Russia will index excise taxes on beer an average of 50% a year in 2010-2012.

Based on the current excise tax of three rubles per liter on beer with alcohol content of 0.5%-8.6%, the proposed indexation would raise the excise tax to 10 rubles per liter over the three years.

Other alcoholic beverages with alcohol content of up to 9% inclusive and wine would be indexed by an average of 30% each year in 2010-2012, while excises on beverages with alcoholic content above 9% would not be indexed in 2010-2011, but would rise 10% in 2012.

The bill would raise the ad valorem component of the excise tax rate on cigarettes, applied to the maximum retail price, by 0.5% each year. The specific component of the excise tax would rise an average of 30% a year in 2010-2012 for filter cigarettes and 50% a year for other cigarettes.

The specific excise rate on other products would be indexed 10% a year in 2010-2012.

The bill would also limit the deduction for the excise tax on raw materials used to make strong alcoholic beverages to the amount of the excise tax on spirits.

The bill also changes the timing of excise tax payments: the entire payment would be due on the 25th day of the month following the end of the tax period instead of the current requirement for equal payments to be made no later than the 25th day of the month following the end of the tax period and no later than the 15th day of the second month following the tax period. The timing for taxpayers with operations in straight-run gasoline and denatured spirits would remain unchanged: payment due on the 25th day of the month following the tax period.