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Russia’s Finance Ministry to suggest increasing wines and spirits excises

According to the ministry, proposal of the Economic Development Ministry to lower excises on alcoholic drinks in strained budget conditions appears strange

© Mikhail Pochuyev/TASS

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Vodka prices go down in Russia

MOSCOW, March 1. /TASS/. Russia’s Finance Ministry will suggest increasing wines and spirits excises by the projected inflation rate at the least, Assistant Finance Minister Svetlana Nikitina told TASS on Tuesday. Proposal of the Economic Development Ministry to lower excises on alcoholic drinks in strained budget conditions appears strange, Nikitina added.

The Economic Development Ministry will suggest lowering wines and spirits excises starting 2017 because of considerable shadow market growth, Deputy Minister Oleg Fomichev said earlier.

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"Proposal of the Economic Development Ministry appears strange at the very least. Higher gasoline taxes along with concurrent vodka tax cut means redistribution of revenues in favor of alcoholic drinks consumers. It is not fully clear how it correlates to budget and social policy goals," Nikitina said.

Considering fairly high inflation in the last two years, lack of indexation of alcoholic drinks’ excise rates means their decline in real value, she added.

"Clearly lobbyists of the alcoholic drinks industry continuously suggest cutting tax rates but the Finance Ministry strongly disagrees with that. Furthermore, we will suggest raising them by the projected inflation rate at the least when formulating the tax policy for the next scheduled period," the official said.

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