Russia: Beer excises to increase by 8.5% in 2007

Excises on beer will go up 8.5% to 2.07 rubles per liter in 2007 from the current rate of 1.75 rubles, Interfax announced May 24.

The Union of Russian Brewers said in a press release that on May 23 the State Duma's subcommittee for tax legislation backed a government-sponsored bill to amend Chapter 22 of the second part of the Tax Code and other legislation. The bill sets excise rates for 2007.

The government is proposing to set the excise on beer with alcohol content of over 0.5% to 8.6% at 2.07 rubles per liter, which is 8.5% higher than the current rate of 1.75 rubles.

The Brewers' Union's chairman, Vyacheslav Mamontov said in the release that the "principle of calculating the excise rate based on the forecasted level of inflation is essentially pro-inflationary, as in the end it pushes up prices." This is essentially an indirect tax on beer consumers, he said.