Russian Tax Authorities Crack Down on Tobacco Company Tax Evasion

Aug.06.2024
Russian Tax Authorities Crack Down on Tobacco Company Tax Evasion
Russian tax authorities audit tobacco companies, uncovering schemes to evade taxes by producing and selling unregistered products. (18 words)

According to a report by the Russian business daily RBC on August 6, the Federal Tax Service of the Russian Federation has conducted a large-scale audit of tobacco companies operating in the domestic market, uncovering numerous schemes used in the production and sale of unregistered tobacco products and cigarettes. This practice, as reported by RBC, can significantly reduce tax payments.


The audit primarily focused on on-site inspections, with the tax authorities comparing the quantity of tobacco raw materials to the output of final products, and analyzing the consumption of special markings and codes. Subsequently, tax officials conducted on-site inspections of the industry.


In cooperation with the Federal Security Service (FSB), the Federal Tax Service of the Russian Federation has seized over 6.2 million packets of counterfeit cigarettes, including Marlboro, Kent, and Rothmans brands, as well as approximately 300,000 counterfeit Belarusian consumption tax stamps and 500,000 counterfeit "treasury" stamps, which were used on the counterfeit cigarettes.


The audit also uncovered issues such as under-reporting of production levels, falsely declaring consumption tax labels, and engaging in fake exports to countries in the Eurasian Economic Union.


Furthermore, dual records of sales of goods have been discovered. Currently, efforts are underway to determine the extent of the damage caused by entrepreneurs in the tobacco and related product distribution sector.


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