Vice Squad
Wednesday, May 12, 2004
Russia to Raise Cigarette Excise Taxes

Friend of Vice Squad Professor Will Pyle sends us this notice from about the impending tax hikes. Current Russian cigarette taxes are among the lowest in the world, and even below those in neighboring Ukraine and Belarus. The changes will raise the excise tax on unfiltered cigarettes by 30 percent and on filtered cigarettes by 17 percent: "If in Europe and the United States the logic behind raising excise taxes would be to get citizens from smoking altogether, then in Russia it is to get smokers to at least smoke cigarettes with filters."

One Duma deputy, formerly a cigarette enterprise director, notes that cigarettes sold in Russia vary tremendously in price, from 2 rubles a pack to more than 40 rubles per pack. He is concerned, and probably rightly so, that the increased excise taxes will undermine the profitability of the manufacturers of the cheaper cigarettes.

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