The Deputy head of the Ministry of agriculture of the Russian Federation: introduction of the excise tax on “harmful products” will not cause price increase

The Deputy head of the Ministry of agriculture of the Russian Federation: introduction of the excise tax on “harmful products” will not cause price increase


MOSCOW, February 10. Planned in Russia, the introduction of excise tax on so-called harmful products will lead to higher food prices. Such opinion to journalists was expressed by the first Deputy Minister of agriculture of the Russian Federation Evgeny Gromyko.

“We don’t think it (the introduction of excise duty – approx.ed,) would lead to higher prices”, – he said.

According to Gromyko, much greater influence on prices are factors such as the requirement to equip the vehicles with tachometers and some other innovations. “This has a much greater impact”, – said the Deputy Minister.

The Initiative Of The Ministry Of Health

As previously reported, the healthcare Ministry has taken the initiative to introduce excise duties on a range of products with a high content of fat and sugar. In particular, such goods can be attributed to soda and products which contain palm oil.

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The Ministry of health of the Russian Federation: the experience of other countries to increase tax on “harmful” food positive

The Minister of economic development Alexei Ulyukayev confirmed that the government is discussing the issue of increasing excise taxes on palm oil and harmful products. The head of the Ministry of agriculture and Ministry of industry and trade endorsed the initiative.

The excise tax can be introduced from 1 July 2016, said Finance Minister Anton Siluanov.

On 6 February, a source in the financial-economic bloc of the government of the Russian Federation said that the imposition of excise tax on soda at the rate of 20% of the cost of the product may bring the Russian budget additional revenue of 600 million rubles a year.

Currently, the list of excisable goods include alcohol and certain types of alcohol products, tobacco, automobile and aviation fuel, motor oil, cars and powerful motorcycles.

Clear criteria and scientific justification

Authorities need to determine clear criteria for additional taxation of products high in sugar and fat. First, input the excise shall be scientifically justified and does not lead to unfair competition, considers Vice-President, sustainable business development and corporate relations Unilever (Anglo-Dutch manufacturer of consumer household products) in Russia Irina Bakhtina.

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Four ministries supported the introduction of excise duties on palm oil

“We believe that public authorities need to determine clear criteria for such a tax. Firstly, such criteria must be based on sufficient scientific justification for the possible harm. They should stimulate innovation and the introduction of more healthy products. And it does not lead to unfair competition and increase the burden on business and the state budget”, – said the Agency Bakhtin. In addition, the authorities must ensure investing the collected revenues in approved programs or research in the field of healthy nutrition, considers Vice-President of Unilever.

The initiative to introduce a tax on products that do not match the who recommendations, may work only through a comprehensive approach, says Bakhtin. This, she believes, involves co-administration certified educational programs to the community in the field of healthy nutrition, appropriate product labelling, restrictions on advertising aimed at children, as well as changes in the formulation of food products.