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EEU countries to maximally converge tobacco and alcohol excise rates

Countries of the Eurasian Economic Union (EEU) may agree on draft agreements on the principles of tax policy in the field of excise taxes on alcohol and tobacco products by February 1, 2019. RBC reported.

The media got a copy of the order on the results of the meeting of the Eurasian Intergovernmental Council, which was held at the end of November 2018. The document notes: members of the union should stipulate that starting from 2024, when calculating local excise tax rates on cigarettes, they proceed from an indicative rate of 35 euros (2,777.88 soms at the rate of the National Bank of the Kyrgyz Republic as of January 22, 2019) for 1,000 cigarettes (average value a country may proceed from in setting the excise tax).

Deviations from the norm should be not more than 20 percent both upwards and downwards. The members of the EEU reached such an agreement for the first time.

«The draft agreements on the principles of tax policy in the field of excise taxes on alcohol and tobacco products have been approved and sent for intrastate approval by February 1, 2019,» Timur Zhaksylykov, Minister of Economics and Financial Policy of the EEC said.

Negotiations on the harmonization of excise tax rates began in 2012: this item is included in Article 71 of the Treaty on the EEU, after which the countries began to develop draft agreements. But the question of deviations from the indicative rate, especially for the cheapest cigarettes, remained unresolved.

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