Putin backs proposal for three-year extension of higher excise deduction for grapes

DERBENT. June 29 (Interfax) - President Vladimir Putin has backed a proposal to extend the higher coefficient for calculating the excise deduction for grapes, which expires at the end of 2023, for another three years.

"Of course I support the joint proposal of the Economic Development Ministry and the leader of the Republic of Dagestan. This refers to maintaining for the period of 2024-2026 the higher coefficient for applying the deduction from the amount of the excise if the grapes are used for production of corresponding beverages using full-cycle technology," Putin said at a meeting with cabinet members on the development of tourism in the North Caucasus on Wednesday.

He also said it is important to take into account Dagestan's successful experience signing investment agreements with businesses that receive such a tax break.

"That is, producers of wine products should assume specific obligations, namely channel additional funds from tax breaks into the implementation of investment plans, including planting new vineyards and developing their material and technical resources," Putin said.

"That is, these funds, which will essentially be received from the government, because they will pay taxes, should be channeled into the development of the sector. Although, as I understand, Dagestan is already one of our leaders, if not the clear leader in the development of winemaking in general. Such an approach benefits both the state and producers," Putin said.

Economic Development Minister Maxim Reshetnikov said at the meeting that the extension of the measure for another three years, which has been agreed with the Finance Ministry, will help develop wine tourism in the region.

"An important decision was made on the tax deduction: when businesses that process grapes and produce alcoholic beverages pay less excise duties on the condition that they reinvest in the sector. Dagestan will invest almost 6 billion rubles in expanding vineyards and in equipment for processing. Businesses have already invested 2 billion rubles of this. There will be 1,000 hectares of new vineyards as a result," Reshetnikov said.

Russia introduced the excise on grapes in 2020.