RUSSIA
Russia’s statistics agency, Rosstat, said that in June 2018, Russia produced 24.4% more cigarettes than 2017, despite anti-smoking measures such as prices hikes and advertising bans. During the first half of the year, the country’s factories produced 131 billion cigarettes.
“The reason for this is the growth of excise taxes,” explained chairman of the board of the International Confederation of Consumer Societies, Dmitry Yanin.
The tax on cigarettes increased by 10% since July 1. The average cost of a pack increased by RUB7.2 (US$0.12). Tobacco manufacturers had known about this in advance, so they began to work in three shifts ramping up production and releasing more cigarettes onto the market before the jump in prices. So, they were able to legally underpay the budget by several billion rubles. This explains the rise in production in the first half of the year.
Statistics show that the anti-tobacco campaign, which began in 2014, has achieved some mixed results. The number of smokers in Russia in four years has supposedly decreased from 40 to 30 million people. At the same time, the industry still brings in a lot of money to the government and fills many holes in the budget. In 2017, due to excises and other taxes on cigarettes and tobacco products, the Russian treasury received a windfall of RUB600 billion.