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April 25, 2003

RUSSIA: Brewers call for cut in tax

The issue of tax on beer has been raised once more by the Russian Brewers Union, which has blamed tax rises for a decline in beer sales and a subsequent shortfall in the state budget.

The issue of tax on beer has been raised once more by the Russian Brewers Union, which has blamed tax rises for a decline in beer sales and a subsequent shortfall in the state budget.


The Union has sent an open letter to Prime Minister Mikhail Kasyanov asking him to take measures “to normalise” the state tax policy toward the beer industry. The union has proposed that the issue be considered at a government meeting.


The Union says a shortfall in the state budget of US$36.5m in the first quarter was the result of a decline in beer production, in turn a symptom of increased taxes.


The country’s beer production fell 5%, compared to the same period last year, to 140.1m decalitres. Meanwhile taxes have been 25% higher from January 1st.


The Union also asked the state to consider health implications of their policy, as the high beer prices forced consumers to turn to low quality spirits.


However, brewers face an uphill struggle as the Tax Ministry is currently considering raising taxes on beer producers further, rather than cutting them.

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