The Russian government has introduced a new system for allocating excise tax income to the fight against bootlegging. The new measures are expected to boost authorities in their battle with illegal alcohol production and distribution.
Under the changes, which came into operation at the beginning of the year, excise taxes levied in regions where vodka and spirits are produced will no longer go to the local administration but will instead go straight to the federal budget. Taxes collected at bonded warehouses in the area where the products are actually sold will stay in the region.
The measures have been welomed by Russia’s National Alcohol Association. “This is positive news,” said the Association’s Pavel Shapkin. “It will sanitise the market and bring more money into the federal budget.”
According to Shapkin, under the previous system, local adminstrations could restrict the sale of spirits produced elsewhere in the country. Local authorities also made it difficult for producers from other regions to obtain the necessary permits and licences. Forcing producers to cover regional demand and impeding distilleries from expanding into other regions encouraged bootlegging, Shapkin said.
Now vodka and spirits will require two excise stamps, one paid in the region of manufacture and one at the warehouse in the area where the product is to be sold.
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By GlobalData
