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Russia sees decline in smokers

Excise rates in Russia are growing annually, and by 2015, this “sin tax” will double once more.

Source : RBTH / 29 May 2014

Tobacco users in Russia decreased by more than 5 percent in 2013, and experts expect a new higher excise taxes to reduce further the sale of cigarettes.

Every Russian smoker knows the cost of his or her favorite brand of cigarettes, so when the price changes even slightly, its affect is felt. This was actually what the regulatory authorities were betting on when they increased the excise tax rate. By their calculations, the average person’s desire to save money would outweigh the craving for smoking.

Russia ranks fourth in world rankings for the biggest number of smokers with 2,786 smoked cigarettes per adult citizen, according to the World Health Organization. However, thanks to current governmental measures, including an increase in excise taxes, the number of smokers should be reduced by 5 percent every year, experts predict.

Excise rates in Russia are growing annually, and by 2015, this “sin tax” will double once more. The tax rate is calculated by a complex formula – in 2015, it will look like this – $28.6 per 1,000 items plus 9 percent of the price.

Another effective measure for decreasing Russian smokers is the law banning smoking in public places. It has been in force only since June 2013, yet has already affected the producers. During the first nine months of 2013, cigarette production declined by 5.4 percent, compared to the same period of the previous year. Experts predict that the tobacco market will continue to decline this year, by 9 percent to 11 percent.

 

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