"Vedomosti". The increase seems small, but it will have a strong impact on both the industry and the structure of alcohol consumption by Russians.

What do they offer?

• Starting from 2020, excise tax rates on still wines will increase from 18 to 31 rubles per liter, on sparkling wines - from 36 to 40 rubles per liter.
• At the same time, a well-known loophole is being closed: the excise tax on wine drinks and carbonated “pseudo-champagne” without added alcohol will be equalized with the excise tax on wine. Currently, there is a single excise tax rate on wine drinks - 18 rubles.
• Excise products include grapes used for the production of wine, wine materials or full-cycle alcoholic beverages. Winemakers producing wine from Russian grapes will receive a tax deduction with an increasing coefficient, and importers and those who use imported wine materials will pay excise duty at the full rate.

Who will lose

Winemakers believe that excise taxes are already high, and increasing them will inevitably lead to an increase in retail prices and a deterioration in the consumption structure.

• The industry will withstand an increase in the excise tax on still wines to a maximum of 20 rubles at a time and up to 25 rubles in the future, experts say. Otherwise, the demand for inexpensive Russian and imported products will fall, and the consumer will again look at stronger and harmful drinks, says Veniamin Grabar, president of the Ladoga company.
• An increase in the excise tax will again lead to an increase in counterfeit goods and the disappearance of more expensive wine drinks into the shadows. After the appearance of the “wine drink” category in 2012, counterfeit products migrated into it. Now this is about 20 million decalitres (dal) per year, or only half the Russian production of still and sparkling wines combined (43 million dal).
• Experts do not expect the majority of consumers of these products to switch from wine drinks to wine.

Who won

Producers of wine made from domestic raw materials are an absolute winner. The only problem is that so far there are only 1.5–2% of production volumes.

• One of these companies is Pavel Titov’s Abrau Durso, which recently agreed with the largest Russian retailer X5 Retail Group on the development of the Russian Vine wine brand. The price should not exceed 300 rubles per bottle.
• Benefits for domestic wine materials should stimulate the establishment of vineyards and a reduction in imports. Now there are about 95,000 hectares of vineyards in Russia, almost 7,000 hectares were planted in 2018. Last year, Russia imported 11.6 million dal of wine materials, the main suppliers being Spain, Ukraine, Uzbekistan and Uruguay.

According to the Ministry of Health, over the past 8 years, alcohol consumption in Russia has decreased by almost 2 times: from 18 to 9.3 liters (in terms of alcohol) per capita. But this is due to the fact that the consumption of strong drinks is decreasing at an accelerated pace. According to Gfk, wine consumption increased by 9% in 2017. Russian production of still wines in 2018 decreased by 4.9%, sparkling wines by 2.6% - with an increase in imports.

What's in it for me?

You can expect that high-quality wine will rise in price a little more, cheap wine will become worse, and alcoholic soda, masquerading as champagne, will completely disappear into the shadows. Not counting the disappearance of Georgian products from the shelves - but already.

Sergey Smirnov

Hello! In this article we will talk about excise taxes on alcohol.

Today you will learn:

1. What is excise duty called and what types is it divided into?
2. Who pays excise taxes on alcohol;
3. What is the procedure for calculating and paying excise tax?

The rates for 2019 for a number of positions have been brought into compliance with Law No. 301-FZ of August 3, 2018. For alcoholic products it remained at the 2018 level. We’ll talk about this, as well as the terms and procedures for payment today.

Excise tax on alcohol: the essence of the concept and why it is needed

Excise tax is a duty established by the state for producers of alcoholic beverages, tobacco products and a number of other goods. But today we will dwell in more detail only on the tax for alcohol producers.
This tax is called internal, operating within the borders of the state.

In addition, excise taxes in Russia are included in the price of goods, which means that the consumer pays for them. If excisable products are sold at retail, the amount of excise tax is not allocated.

So why are excise taxes needed? The answer is simple: so that the state receives profit from the manufacture of products that are popular among the population. And also, according to experts, increasing excise taxes is an effective measure in the fight against excessive alcohol consumption.

Negative sides:

• Increase in volumes of illegally imported alcohol;
• The risk of increasing sales of obviously low-quality alcoholic beverages.

What is subject to excise tax

• Sales of alcoholic beverages within the borders of the Russian Federation, carried out by its manufacturer;
• Sales of products that were confiscated by court verdict;
• Transfer of alcohol by the manufacturer to;
• Export within the borders of the customs territory of the Russian Federation.

Who pays excise taxes

To begin with, let us clarify that those who sell alcohol wholesale are not excise tax payers.

In other cases it is paid:

• Enterprises;
• Persons moving such products through customs.

How is it different from VAT?

VAT, like excise tax, is an indirect tax. But there are fundamental differences between them, which we will discuss in more detail.

1. Accrual occurs on a much larger volume of goods. It also applies to services provided by the payer. In turn, excise taxes are established only on goods;
2. The next difference is that excise tax is a real burden on the entrepreneur, and when paying VAT, if you use deductions wisely, the burden can be significantly reduced;
3. It is not always possible to compensate for the excise tax rate using a deduction;
4. Excise taxes, unlike VAT, have a serious impact on the profitability of the company.

Excise taxes in Russia began to operate in 1991. The main elements from which the excise tax is formed are the base, object and tax rate.

Types of excise tax rates

• Specific;
• Combined;
• Ad valorem.

Specific

Presented in a fixed amount for 1 unit of goods. Most often used.

Ad valorem

It is uniform for the entire country and is set as a percentage of excisable goods. Its weakness is that each time you need to calculate the customs value of the product.

Combined

Combines specific and ad valorem rates.

Excise tax rates on alcohol

Excise taxes on alcohol in 2019:

Product type	Tax rate 2019	Tax rate 2018	Tax rate 2017 (from 01.01.)
Ethyl. alcohol, which is sold by companies involved in the production of cosmetics. or perfume. products	1 liter / 0 rub.	1 liter / 0 rub.	1 liter / 0 rub.
Ethyl. alcohol sold by companies that do not pay advance excise taxes	1 liter – 107 rub.	1 liter – 107 rub.	1 liter – 107 rub.
Alcohol containing more than 9% alcohol (excluding beer and sparkling wine)	1 liter – 523 rub.	1 liter – 523 rub.	1 liter – 523 rub.
Alcohol containing less than 9% alcohol (excluding beer and sparkling wine)	1 liter – 418 rub.	1 liter – 418 rub.	1 liter – 418 rub.
Wine, excluding sparkling wine	1 liter – 5 rub.	1 liter – 5 rub.	1 liter – 5 rub.
Sparkling wine	1 liter – 36 rub.	1 liter – 36 rub.	1 liter – 27 rub.
Beer with up to 0.5% alcohol	1 liter – 0 rub.	1 liter – 0 rub.	1 liter – 0 rub.
Beer containing from 0.5% to 8.6% alcohol	1 liter – 21 rub.	1 liter – 21 rub.	1 liter – 21 rub.
Beer with more than 8.6%	1 liter – 39 rub.	1 liter – 39 rub.	1 liter – 39 rub.

The excise tax on alcohol brings the highest income to the state when compared with other taxes. And tax rates on vodka are much higher than on other alcohol. This is an argument in favor of reducing the production of such a drink.

Ethyl alcohol is the main source of profit from the use of excise duties. The excise duty on alcohol brings the highest income to the state when compared with other taxes. And tax rates on vodka are much higher than on other alcohol. This is an argument in favor of reducing the production of such a drink.

Comparing rates over several years, we see that in 2019 they remained almost at the level of 2018.

Let’s see below how this affected alcohol prices in various retail chains.

Level of increase in alcohol prices

Excise taxes on alcohol are planned to increase only from 2020. on the:

• Products containing ethyl alcohol over 9% up to 544 rubles, the excise tax is now 523 rubles.
• Products containing ethyl alcohol less than 9% up to 435 rubles, against 418 rubles, the current rate for 2018.
• Wine – the excise tax rate will be 19 rubles. per liter, now it is 18 rubles.
• Ethyl alcohol sold by companies that do not pay advance excise tax payments up to 111 rubles. per liter Now the excise tax rate is 107 rubles. per liter

Calculation and payment of excise taxes

In this part of our conversation, we will give an example of how excise tax is calculated, for example, at a fixed rate.

For this, the following calculation formula is used:

A = Nb * Ts, where A is the accrued amount of excise duty, Nb is the tax base (the number of goods sold), Tc is the fixed rate.

So, Company S. produced and sold 700 liters of beer, which is strong. This means that she will have to pay: 700 * 21 = 14,700 rubles.

The combined rate is calculated using the following formula:

A = Nb * Tc + O + Ac /100%, where A is the amount of excise duty, Nb is the tax base, Tc is a fixed rate, O is the amount that will be received upon the sale of Nb, Ac is the percentage rate.

Timing and procedure

The payment deadline is set until the 25th day of the month following the reporting month. For example: excise tax for March is paid until April 25. It must be paid where the product was produced and sold from the warehouse.

Goods exempt from excise duty

The following are not included in the payment:

• Taxable goods exported;
• Manipulations on the transfer of excisable goods in order to produce excisable products, but only on the territory of one company;
• Excise goods confiscated at customs;
• Excise goods imported through the port zone.

The situation with other excisable products

It is worth noting that the excise tax was raised not only on alcohol. The list for increase includes cars, cigarettes, cigars, and petroleum products.

Labeling of alcoholic beverages

This product must have excise or special stamps. They certify that the goods are subject to tax, and also certify that the conditions for the release of products fully comply with legal requirements. In addition, the excise stamp is a reporting document.

Consequences of non-payment

Failure to pay the excise tax entails the forced collection of payments that were not made and penalties for late payment.

Conclusion

Let's summarize. Excise alcohol is an integral part of the market. The tax on this product performs an important function: it not only increases the state budget, but also protects the consumer from counterfeits.

The authorities proposed canceling benefits for producers of Russian branded alcohol

Domestic winemakers producing protected wines will lose reduced excise tax rates, as follows from the “Main Directions of Budget and Tax Policy.” WTO rules require equal excise taxes on Russian and imported wines

Photo: Sergey Malgavko / TASS

​The Ministry of Finance in the draft “Main Directions of Budget, Tax and Customs Tariff Policy” for 2019-2021, discussed today in the State Duma (*.pdf), proposed a number of significant changes in the procedure for excise taxation of wine products. The main one is the abolition from 2019 of the reduced excise tax rate on wines and champagne with a protected geographical indication (PGI) and a protected appellation of origin (PAO). Since only Russian wines made from Russian grapes can be wines with PGI and ZNMP, the Ministry of Finance’s proposal means that excise taxes on domestic and imported wines will be equalized.

According to WTO rules

Currently, excise taxes on still wines without PGI and ZNMP are 18 rubles. per liter, for sparkling wines without protection - 36 rubles. per liter, and for protected wines and sparkling wines - 5 and 14 rubles. respectively. The Ministry of Finance and the Federal Customs Service in May last year that, according to Russian legislation, imported wines cannot be classified as wines with PGI/ZNMP, which means they are subject to regular excise tax, and not a reduced one. After this, wine importers began to argue that excise preferences for Russian winemakers violate the rules of the World Trade Organization (WTO). In October 2017, Minister of Economic Development Maxim Oreshkin confirmed that the European Union has claims within the WTO to Russian excise taxes on imported wines.

According to WTO rules, it is impossible to create tax preferences for similar local goods, so the preferential excise tax on wines with PGI did not fit into the organization’s norms, says Alexander Stavtsev, head of WineRetail. The goal of equalizing excise taxes is “to create favorable conditions for the development of winemaking in Russia, which at the same time would meet the norms of international law and Russia’s international obligations,” the press service of the Ministry of Finance confirmed to RBC.

If the Ministry of Finance's proposal is adopted, excise tax rates on domestic and imported wines will become the same: 18 rubles. for still wines and 36 rubles. for sparkling. In 2020, according to current legislation, they will increase by 1 ruble. - up to 19 and 37 rubles. In the draft “Main Directions”, the Ministry of Finance says that the rates of all excise taxes already established for 2019-2020 will not change, and for 2021 they will be indexed to the forecast inflation rate (4%). Based on this, excise taxes on still and sparkling wines in 2021 will be 20 and 38 rubles. respectively.

From our own grapes

The initiative of the Ministry of Finance will equalize in excise duties not only Russian and imported wines, but also domestic wines with and without PGI/ZNMP. However, in order to maintain the incentive for domestic winemakers to create production of protected wines, the Ministry of Finance intends to introduce excise taxes on grapes used for the production of wine, champagne, and cognac distillate, and to provide a tax deduction “using an increasing factor” to those producers who use grapes of their own production.

The development of our own vineyards is included in the development of viticulture and winemaking in the Russian Federation for the period until 2025 - in particular, we are talking about “stimulating the growth of the number of small wineries that produce wine products from their own grapes.” From the document of the Ministry of Finance it follows that wine producers who do not grow grapes themselves, but purchase them from other Russian enterprises, will not receive the right to a deduction.

So far, very little wine with PGI and ZNMP is produced in Russia, so excise tax revenues from them are symbolic. In 2017, the consolidated budget collected only 88 million rubles. excise taxes on protected wines and champagnes; At the same time, excise taxes on imported wines, champagnes and wine drinks amounted to 6.2 billion rubles. (data from the Federal Treasury).

At the end of 2017, about 4-5 million bottles of wine with PGI were produced in Russia, which corresponds to no more than 1.5% of the total wine production, according to statistics from the President of the Union of Winegrowers and Winemakers Leonid Popovich. However, according to him, the production of such wines is constantly growing, so today their share may already be about 2-3%.

Equalization of Russian producers and importers will have a bad impact on the Russian wine market, Popovich believes. However, a tax deduction for producers who use their own grapes gives hope that the negative effect will be smoothed out, he adds. At the same time, it is important that the law provides for a deduction for the use of not “own” but “Russian-produced” grapes - not all winemakers are ready to grow the required amount of grapes, but can purchase them from other Russian producers, says Popovich.

Russian wine producers have been trying with great difficulty in recent years to achieve minimal preferential conditions, and the Ministry of Finance’s proposal largely negates this work, says Pavel Titov, president of the Abrau Durso wine house. Abrau Durso itself produces part of the wine from its own grapes and part from imported wine materials, so the current benefits do not apply to all production, Titov explained. In general, the ministry’s initiative is not yet entirely clear - for example, almost never a wine producer exclusively has “its own grapes,” he says. And it will be difficult to pay the excise tax on grapes even taking into account the deduction; in the end, this will again lead to debt burden on producers, Titov concludes.

The press service of the Ministry of Finance clarified to RBC that the tax deduction will be provided to wine producers of a “full production cycle” who use “any grapes” as raw materials (that is, including those purchased from other Russian legal entities). “Specific proposals with the most optimal amounts of tax deductions, increasing coefficients, etc. will be defined later. These issues are still being discussed,” the press service added.

The Ministry of Finance also proposed levying excise taxes on “wine drinks without the addition of ethyl alcohol” in the same amount as on champagne wines. Now such drinks, often disguised as champagne, are subject to excise duty at a rate of 18 rubles. per liter, like regular wine. The Ministry of Finance, therefore, proposes to increase the excise tax on them to 36 rubles. Equating excise tax rates for wine drinks masquerading as champagne with excise taxes on champagne is a long-overdue and fair measure, Popovich says, and is aimed at removing the economic incentives for making such drinks.

Excise taxes on perfume

Another important excise regulation measure proposed by the Ministry of Finance is the inclusion in the list of excisable goods of any alcohol-containing perfume and cosmetic products, regardless of the volume of the container in which it is bottled. At the same time, it is proposed to introduce a zero excise tax rate on such products (currently, zero excise tax applies only to perfumes and cosmetics in metal aerosol packaging). In addition, the Ministry of Finance proposes to give such manufacturers the right to a tax deduction in the amount of the excise tax calculated on the purchase of ethyl alcohol, if the manufacturer documents the use of alcohol for the production of perfumes and cosmetics.

The Ministry of Finance previously prepared a bill containing similar proposals. The point of the initiative is to further control the turnover of ethyl alcohol through tax regulation measures and limit the turnover of alcohol-containing products used as surrogate alcohol. Excise tax is not paid to the budget on the sale of perfumes at a zero rate (that is, there is no fiscal logic here), but the manufacturer is required to submit an additional excise tax declaration, which shows how many alcohol-containing products were produced.

Participants in the perfume and cosmetics industry criticized the Ministry of Finance's bill at the time. They warned that bona fide market participants would be subject to an additional burden in the form of increased reporting (although they are already carefully monitored by regulators), while this would not affect producers of “dual-use” alcohol-containing liquids. It is better to combat surrogates by establishing minimum retail prices for alcohol-containing perfumes and cosmetics at the same level as the retail price of vodka, said business responses to the Ministry of Finance bill. As a result, the Ministry of Economic Development, as part of the regulatory impact assessment procedure, did not support the bill and asked the Ministry of Finance to finalize it.

The government introduced amendments to the Tax Code to the State Duma, increasing excise taxes on wine and wine drinks for the first time since 2017. If parliament approves the initiative, then from 2020 the rates will almost double: from 18 to 31 rubles per 1 liter of still wine and from 36 to 40 rubles per 1 liter of sparkling wine. As a result, retail prices for wine will increase by 15–20%, warned the public organization Opora Rossii, noting that the industry will not withstand rates of more than 25 rubles per liter.

“We call for stopping the growth of the tax burden, because the industry has only just begun to recover. Even if you raise taxes, you need to do it gradually, over a long period. Imagine that your income tax was 13%, and after six months 26% will be deducted from your salary. How can you feel about this? - complains the president of Opora Russia, Alexander Kalinin.

Low-income consumers buying budget wine will suffer the most from the increase in excise taxes, says Vadim Drobiz, director of the Center for Research of Federal and Regional Alcohol Markets (CIFRRA).

— In our country, approximately 50% of wine is sold at a price of up to 200 rubles, and 90% of all wine is drunk by women.

Wine, which costs from 130 to 200 rubles, will rise in price by about 20%. Therefore, for women from low social strata this is a catastrophic increase.

The Ministry of Finance explains this step by “the need to bring excise tax rates on various alcohols into line with comparable alcohol content, equal to the degree of harmfulness of the product,” Vedomosti previously wrote. In addition, an increase in excise taxes is needed to comply with WTO norms, which require equalization of rates on Russian and imported wines (Russian winemakers currently enjoy a number of tax preferences compared to importers).

However, experts are convinced that the government’s motives are purely fiscal, and concerns about the health of citizens and international trade standards are used as a pretext to increase revenues to the budget.

— There are no WTO norms, no one follows them. It's made out of nothing. And the budget already has a huge surplus; we don’t know why we should increase it further.

The only ones who will benefit from the increase are producers of vodka and other strong drinks, and cheap ones at that,” says Kalinin.

Consumers will not be able to switch to cheaper wine, because making wine is difficult - there are no powder products in this segment, says Mikhail Smirnov, editor-in-chief of the Alkogol.Ru website.

— The consumption of imported wine will increase, which will be comparable in price to domestic wine, which means that Russian producers will lose. Plus, the underground production of alcohol, counterfeit goods and fakes will begin to develop with terrible force. Instead of buying a bottle of wine, a person will buy a bottle of fake vodka.

A simultaneous increase in the excise tax rate on both wine and wine drinks (at least 50% consisting of wine materials, the rest being various additives) will lead to the creation of a huge market for illegal wine products, agrees Drobiz.

“Today we already have a lot of illegal vodka, which is produced in artisanal conditions and sold in unlicensed retail: in kiosks, by hand, and so on. When the prices for natural wine and wine drinks are almost equal, a large volume of illegal wine products will be added here at a price of 80-100 rubles.

The proposed increase in excise taxes will make wine less accessible to consumers and thereby complicate the process of switching to drinks with lower alcohol content, although this is precisely the goal that should be strived for. In Russia now there is no trend towards increasing consumption of wine instead of stronger alcohol, says Drobiz.

— In Soviet times, consumption was as follows: wine - 16 liters per capita, wine products - 28 liters. Today we consume 3.5 liters of wine, 7.5 liters of wine products. The difference is obvious. At the same time, beer consumption was 24 liters per capita, and now it is 50 liters. Strong alcohol - 10 liters, now - 15-16 liters.

That is, in Soviet times we were a wine and vodka country, and now we are a beer and vodka country. There is practically no growth in wine consumption; the main consumer is young girls and women from 22 to 45 years old.

However, there is no need to worry about Russian winemakers: they will throw all their resources into finding a compromise with the government, which is actually interested in supporting the wine industry. The bill already provides for an excise tax deduction for the use of wine materials produced in Russia. In theory, this should allow domestic producers to keep the excise tax rate at the same level.

But the consumer in this situation cannot be envied - he will not receive any compensation for rising prices and decreasing quality of products. Many fellow citizens will have to rejoice at the achievements of domestic winemaking over a bottle of vodka.