Regions – beer producers can lose 140 billion rub. with a transfer of beer excise taxes to the federal budget (2013-12-02)

Legislative Assembly of the Vladimir Region, where there is no one large alcohol producer, introduced a draft bill to the State Duma with correction of the article 56 of the Budget Code of the RF containing amendments for splitting of excise taxes for alcohol without rectified ethanol among budgets. According to the draft bill percent of taxes transferred to the regional budget is cut to 50% and the other half – to the federal budget. At present all 100% are coming to the regions.

You can find the draft bill by the references:

Project of Federal bill
Ordinance
Explanatory note

The authors of the document believe that this will lead to the more equitable distribution of tax returns: in favor of alcohol producers as well as “drinking” regions (notes of the Union «Barley, Malt, Hops & Beer in Russia»: the Ministry of Finance has got alternative amendments of the Federal Service for Alcohol Market Regulation that mean the transfer of the alcohol excise tax to the federal budget completely.

“The draft bill shall prevent unfair distribution of tax returns”, – tells an initiator Maxim Vasenin. In the explanatory note it is said that regions – large alcohol producers receive up to 6,5 billion rub. to the budget and regions without such production – no more than 0,4 billion rub.

Nowadays excise duties for products containing over 9% of alcohol produced without ethanol (beer, wine) and beverage with less than 9% of alcohol are directed to the budget of the region-producer. A share of excise taxes for distilled products is 40% and the rest is transferred to the federal budget. Excise duties for alcohol from the food raw material and alcohol-containing products are divided equally between regional and federal budgets. This situation leads to the budget imparity of the constituent entities. Regional authorities are interested in alcohol production development because they earn a profit on excise taxes. In the estimation of the Chief of the National Centre for Alcohol Policy Development Pavel Shapkin consequences of such policy are poor, adding that regions dependency from alcohol producers must be stopped. The Head of the Russian Regional and Federal Alcohol Markets Studies Center Vadim Drobiz is viewing positive signs in the reform of excise tax system: regions- alcohol producers block the entry to the domestic market for producers from other regions and the project of the Federal Service for Alcohol Marker regulation solves this problem.

The Union «Barley, Malt, Hops & Beer in Russia» is planning to consider this question in the nearest meeting of the start-up Expert Council and give an expert report to the legislative and executive authorities of the Russian Federation.

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