Expanding Digital Consumption Tax in Russia

Dec.27.2022
Expanding Digital Consumption Tax in Russia
Russia plans to expand digital consumption tax to include tobacco and nicotine products, using the Chestny Znak marking system.

The Federal Tax Service of the Russian Federation plans to expand the digital consumption tax to include a wider range of goods, including tobacco and nicotine-containing products.


The administration of the consumption tax will be based on the Chestny Znak labeling system, as announced by Alexander Vodovozov, the Deputy Head of the Taxation Office at the Federal Tax Service of the Russian Federation, during the 18th All-Russia Tax Forum, held under the auspices of the Russian Federation Chamber of Commerce and Industry.


Earlier, the government prepared an order to completely shift tobacco and nicotine-containing products from paper consumption tax stamps to digital markings beginning in 2024. The Tobacco Industry Development Committee stated in a letter addressed to the Federal Committee on Budget and Financial Markets that the transition from paper consumption tax to digital consumption tax will result in manufacturers saving over 2 billion rubles annually.


The history of consumption tax and digital consumption tax is one of the new trends currently being experimented and discussed. There are no official regulations yet, but efforts are being made to develop this story and implement it in collaboration with the Federal Tax Service and the Ministry of Finance. If successful, this could have a significant impact on a wide range of products, not just taxable goods, as many items have entered the realm of digital labeling. This was stated by A. Vodovozov.


A representative of the Russian Federal Tax Service clarified that the tobacco consumption tax will be collected based on the information from the labeling system at the time of production. "In fact, the information about the cigarettes released from production will be known at the time of release. That means taxpayers don't have to wait 25 days after the end of the tax period to learn about the tax base they intend to declare for the month," added Vodovozov.



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