Excise tax on cigarets and alcohol to double and quadruple in Kazakhstan
Sept 20. Tengrinews
Kazakhstan Minister of Economy and Budget Planning Yerbolat Dossayev has explained the coming raise of the excise tax on alcohol and tobacco, Tengrinews.kz reports citing the Ministry’s press-service.
“The excise on tobacco is currently 1,550 tenge ($10) per 1,000 cigarettes. We will raise it to 3 thousand tenge ($20), i.e. almost double it, starting from 2014. The plan is also to gradually raise the tax to 45 Euro ($61) per 1,000 cigarettes by 2020,” the press-service cites the Minister.
Speaking of the excise taxes on alcohol, he said that the excise tax for 1 liter of spirit is currently at 2.5 Euro ($3.4). It will be raised to 5 Euro ($6.8) in 2014 and 8 Euro ($10.1) in 2016.
He believes that raising the taxes on alcohol and cigarettes would be good for Kazakhstan not only from the economic point of view.
Cigarettes and alcohol are too cheap in Kazakhstan, the Minister said. According to the World Health Organization, Kazakhstan is among the top 30 countries by consumption of alcohol: 7-8 liters per capita.
“I am far from cherishing the illusion that everyone will quit smoking after the prices of cigarettes rise or that people will quit drinking if vodka becomes more expensive. But at least, I think, there will be less new smokers and alcoholics, as people will think whether they should start smoking when a pack of cigarettes costs $5-10,” Dossayev said.
Commenting on the possible growth of unregistered home-made production, the Minister said that the market already existed in Kazakhstan, but the control should be enhanced.
“We will tighten the rules of alcohol sale so that the spirits are sold only in large trade centers and special stores. Violation of these rules will result in a tougher responsibility as we are suggesting to bring the current penalty of 200 to 500 monthly calculation indexes ($2,000 to $6,000),” the Minister said. Depending on the scale of the violation, the penalties include seizure of the the goods, suspension of the license for alcohol sales and criminal liability.