BAKU, Azerbaijan, Dec. 25
By Nargiz Sadikhova - Trend:
Countries of Eurasian Economic Union (EAEU) signed an agreement to harmonize excise taxes on cigarettes and thus, create conditions for functioning of tobacco market in EAEU, Trend reports with reference to the Eurasian Economic Commission (EEC).
The corresponding agreement on the principles of tax policy in area of excise taxes on tobacco products was signed by vice prime ministers of the EAEU member countries on Dec.19, 2019, in Saint Petersburg (Russia).
Thus, starting from 2024, when calculating the national excise rates on cigarettes, the EAEU countries will base it on an indicative rate of 35 euros for 1,000 cigarettes with a deviation of no more than 20 percent to a greater or lesser extent.
The period from 2020 through 2024 was determined as a timespan to reach the indicative rate in order for business to adapt to new requirements.
According to Member of the Board – Minister in charge of Economy and Financial Policy of EAEU Timur Zhaksylykov, the existing gap in excise tax is the main reason for the increasing volume of illegal tobacco products in EAEU.
“The gradual harmonization of excise rates on cigarettes will help sustain development of illegal tobacco market. Harmonization also creates good conditions to increase volume of mutual trade of tobacco products, promote equal competitive conditions for business, increase budget revenues from excise taxes, and improve conditions for legal turnover of tobacco products. Introduction of an indicative rate on tobacco products and establishment of a five-year period for its achievement will contribute to planning business in the medium term,” Zhaksylykov said.
EAEU countries also empowered the EEC Council to approve the indicative rate and the deviation range for another five-year period. In addition, an advisory mechanism is being introduced in the case of sharp volatility of national currency rates.
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