Russia Blames Illicit Trade for Tax Losses

The Russian government lost more than RUB46 billion ($481.33 million) in tax earnings in the first half of 2023 as a result of the illicit trade in cigarettes, reports Interfax.

“According to the latest study, which ended this month, the share of illicit cigarette trafficking was 13.3 percent in terms of smokers,” said Vladislav Zaslavsky, director of the Russian Industry and Trade Ministry’s department for the system of digital marking of goods and the legalization of the circulation of products.

“The minimum amount of losses, according to the NNCC [National Scientific Center for Combating Illicit Trafficking in Industrial Products], is estimated at RUB46.5 billion,” Zaslavsky said on Aug. 24 during a retail round table in the Volga region.

According to Zaslavsky, each percent of the share of illicit cigarette trafficking costs the federal budget about RUB7 billion in excise taxes alone.

The NNCC will conduct a study on “nicotine-containing products” in the second half of 2023. As of the end of 2022, the market share of illegal nicotine-containing products was 79 percent, including 93 percent in illegally sold nicotine-containing liquids.