22.05.2019, 11:28
EAEU Сountries Didn't Receive $ 1 Billion in Taxes from Illegal Cigarettes
Source: OREANDA-NEWS
OREANDA-NEWS. For 2018, the countries of the Eurasian Economic Union (EAEU) did not receive about $ 1 billion in taxes due to the growth in sales of illegal tobacco products, analysts of the consulting company KPMG calculated. According to KPMG estimates, if in 2015, illegal cigarettes occupied only 0.6% of the tobacco market in the EEU countries, by the end of 2018, the level reached 6.8%. The number of cigarettes sold in 2018 illegally exceeded 20 billion pieces, analysts estimate.
The strongest growth of illegal products and, as a result, analysts record the largest tax losses in Russia. According to their estimates, the share of illegal cigarettes is 8.7% of the Russian tobacco market. The Russian market accounts for 95% of the illegal cigarettes identified during the survey. The main influence on the growth of such products in Russia is provided by supplies from other countries that are members of the union. This is due to rising prices due to an increase in excise tax: according to analysts, cigarette prices in Russia have become almost 50% higher than in Kazakhstan, which is the second largest country in terms of the cost of tobacco products among the EEU member countries.
Analysts point out that they managed to reduce the flow of illegal cigarettes between Kazakhstan and Russia due to the convergence of the excise rate. Thus, the cost of a pack of cigarettes in Kazakhstan since 2015 has increased one and a half times - from 53 to 78 rubles. Currently, the countries - members of the EAEU are discussing the harmonization of excise taxes on cigarettes.
It was determined that from 2024, when calculating local excise rates on cigarettes, countries will proceed from an indicative rate of € 35 per 1,000 cigarettes (the average value that a country can push when determining its excise tax) with deviations of not more than 20%, as in larger and smaller. The agreement has not been signed yet.
The strongest growth of illegal products and, as a result, analysts record the largest tax losses in Russia. According to their estimates, the share of illegal cigarettes is 8.7% of the Russian tobacco market. The Russian market accounts for 95% of the illegal cigarettes identified during the survey. The main influence on the growth of such products in Russia is provided by supplies from other countries that are members of the union. This is due to rising prices due to an increase in excise tax: according to analysts, cigarette prices in Russia have become almost 50% higher than in Kazakhstan, which is the second largest country in terms of the cost of tobacco products among the EEU member countries.
Analysts point out that they managed to reduce the flow of illegal cigarettes between Kazakhstan and Russia due to the convergence of the excise rate. Thus, the cost of a pack of cigarettes in Kazakhstan since 2015 has increased one and a half times - from 53 to 78 rubles. Currently, the countries - members of the EAEU are discussing the harmonization of excise taxes on cigarettes.
It was determined that from 2024, when calculating local excise rates on cigarettes, countries will proceed from an indicative rate of € 35 per 1,000 cigarettes (the average value that a country can push when determining its excise tax) with deviations of not more than 20%, as in larger and smaller. The agreement has not been signed yet.
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