During a plenary session on April 11th, the Russian State Duma voted with over 90% in favor of a proposal to modify certain legislative regulations in the Russian Federation, which includes setting a minimum retail price for e-cigarette products. The proposal will now be reviewed by the Federal Assembly of the Russian Federation and awaits the signature of the president.
Why set a minimum retail price for electronic cigarettes after the proposal? How will the new price standards be calculated? These questions have received widespread attention. In response, Liang Jiasen, a market researcher at 2FIRSTS in Russia, provided a professional interpretation of the proposal.
Proposal content:
The sales price of nicotine-containing products must not be lower than the minimum price set for such products by the Russian government. The minimum price for such products is determined by the methods established by the Russian Federation government.
2FIRSTS analysis:
The N15-FZ Federal Law in Russia has established a minimum retail price for tobacco products, known as the EMCTP. This price serves as the basis for calculating consumption taxes and value-added taxes collected by the federal government. The law also prohibits any tobacco product from being sold below the minimum retail price.
The calculation formula is as follows:
The EMCTP equation can be defined as 0.02 multiplied by the area of a surface (SA), multiplied by the sum of noise reduction decibel sensitivity (SNDS) plus one, and then multiplied by 1.4.
The minimum consumption tax rate in rubles per 1000 cigarettes or cigarillos, as stipulated by the Tax Code of the Russian Federation during the same period.
The value-added tax rate determined by the tax regulations in the Russian Federation, as per SNDS.
This legislation implies that in the future, national standards will set a minimum retail price for electronic cigarette products, and the minimum pricing authority for any such products will be determined by the Russian Federation government. Violations will result in penalties under the Administrative and Criminal Codes of the Russian Federation.
This proposal is set to take effect on September 1st, 2023.
Expert Analysis Series:
Expert analysis 1: Russia's ban on flavored e-cigarettes covers all electronic cigarette products, with specific additive standards yet to be disclosed.
Expert analysis 2: Russia proposes ban on online sales and offline display of e-cigarettes, effective June 1st.
Special report: Progress and expert analysis on the ban of flavored e-cigarettes in Russia (Click on the image below to be redirected).
Related Articles:
What is the current progress of the ban on flavored tobacco in Russia's legislative process?
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Russia's ban on flavored additives in electronic cigarettes will take effect on September 1. The proposal to ban flavored e-cigarettes was first discussed on April 11. Here is the full text of the proposal.
Russia proposes a maximum fine of 500,000 rubles for selling e-cigarettes to minors.
Russian Prime Minister Mikhail Mishustin is considering a ban on electronic cigarettes.
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