Russia might hike excises on alcohol, cigarettes, automobiles by 5% in 2024 - source

MOSCOW. July 12 (Interfax) - Russia's Finance Ministry is proposing to raise excise duties on spirits, cigarettes and automobiles by 5% in 2024 instead of by a maximum of 4% as previously planned, but the bigger increase would not apply to Russian sparkling wine, liquids for vapes or motorcycles, a source familiar with the preparation of changes to the Tax Code told Interfax.

The ministry plans to submit the amendments to the State Duma by the end of the week for the second reading of the bill (No. 369931-8), the source said.

Alcohol

Under the current Tax Code, excises on spirits were supposed to be indexed by 4% to 638 rubles per liter in 2024, but the ministry's bill proposes to index them by 5%, meaning they would increase from 613 rubles to 643 rubles per liter. In 2025 the indexation will again return to 4% and the excise will go up to 669 rubles, and in 2026 it will increase to 696 rubles.

The excise on alcoholic beverages with low alcohol content (ethyl alcohol up to 9%) will be indexed by 5% in 2024 and increase to 514 rubles per liter instead of 510 rubles. The excise will go up to 535 rubles in 2025 and 556 rubles in 2026.

The excise on wine will increase by 5% to 36 rubles per liter in 2024 and go up to 37 rubles in 2025 and 38 rubles in 2026.

However, the planned excise rate indexation for cider, perry, mead, sparkling wine, and Russian sparkling wine and beer will remain unchanged.

Cigarettes

Excises on cigarettes and papirosa cigarettes will also go up by 5% in 2024 instead of 4%, to 2,731 rubles per 1,000 units plus 16% of the estimated value based on the maximum retail price, but not less than 3,709 rubles. This will increase to 2,840 rubles plus 16% of the maximum retail price, but not less than 3,857 rubles in 2025 and to 2,954 rubles per 1,000 units plus 16% of the maximum retail price, but not less than 4,011 rubles in 2026.

The excise on cigars will increase by 5% to 292 rubles per unit in 2024 instead of the planned 289 rubles, and go up to 304 rubles in 2025 and 316 rubles in 2026.

The previously planned indexation for liquids for electronic nicotine delivery systems will remain unchanged.

Automobiles

The ministry now intends to raise the excise on cars with 90-150 hp engines by 5% instead of 4% to 58 rubles per hp in 2024, and 5% to 557 rubles for 150-200 hp cars. There will also be a 5% increase in 2024 to 912 rubles for automobiles with 200-300 hp, 1,555 rubles for those with 300-400 hp, 1,609 rubles for those with 400-500 hp and 1,662 rubles for those over 500 hp.

The excise hike for motorcycles will remain at the previously planned 4%.