The cigarette companies have opposed the introduction of EGAIS in the tobacco industry

Association of manufacturers of tobacco production “Tabakprom” has sent a letter to the President of the government of Russia Dmitry Medvedev with a request not to allow the extension of the USAIS (unified state automated information system) for the production and trafficking of tobacco products. “Extending USAIS is inefficient and redundant,” said the letter, which is available to RBC.

USAIS appeared in the alcohol market when the volume of illegal products reached 40%, while excise duty collection is just 60%, say the authors of the letter. Meanwhile, in their opinion, the situation in tobacco industry is fundamentally different and demonstrates “the high level of collection of excises, 99%, virtually no illegal products”.

The authors refer to the fact that the proceeds of tobacco excise taxes to the budget in recent years is steadily increasing — with of 139.5 billion rubles in 2011 to 379,1 billion rubles in 2015. this year, according to the forecast of the Association, the tobacco manufacturers pay to the state already 474 billion rubles payments.

The share of illegal products on the market when it is small: in 2016, it is estimated at 2.2%. However, last year it was just 1.1%, the authors acknowledge the letter.

The growth of illegal products twice and drew the authorities ‘ attention to participants of the tobacco market. In particular, the issue of tightening control over the industry, discussed the October 25 meeting of the government Commission for improving of competitiveness and regulation of the alcoholic market under the chairmanship of Deputy Prime Minister Alexander Khloponin. So, the Ministry of Finance and the Ministry of agriculture was instructed to study the question of the feasibility of “extending” USAIS on the production and retail sale of tobacco products, specified in the minutes of the meeting, which is at the RBC. Their proposal, the Ministry shall submit to the government until November 14.

60% illegally sold in Russia cigarettes come from neighboring countries — Belarus, Kyrgyzstan, Kazakhstan, recalls the Director for corporate relations “BATH Russia” Alexander Ljutyj. Therefore, in his opinion, “the creation of any additional labelling of tobacco products will not give results, if such systems do not appear in all the countries of the Eurasian economic Union.” The most effective way of combating illegal trade in cigarettes could be the harmonization of excise rates with the neighbors in the EEU, he said.

“Absence of excise harmonization in the EEU brought such Belarusian brands as FEST, NZ, MINSK, and in the top 5 most popular cigarette brands on the illicit market”, — said earlier RBC Vice-President of JTI, corporate Affairs and communications Russia Sergey Kiselev. According to his estimates, the Belarusian cigarettes are sold in Russia at a price of 40-50 rubles. per pack, while cheap legal cigarettes, manufactured in the Russian factories, — for 75 rubles.

The current system of USAIS not take into account particularities of production of cigarettes, as well as existing private systems manufacturers in the tobacco industry, says Vice-President for corporate Affairs of affiliated companies “Philip Morris international” in Russia Sergey Slipchenko. Meanwhile, adaptation costs USAIS for the tobacco industry can be many times greater than a hypothetical budget revenues from withdrawal of products from the shadows and to increase the share of illegal products, warns Alexander Fierce.