The Russian Ministry of Finance plans to raise tax on tobacco by 50% to bring it closer to European levels. The World Health Organization has suggested Russia needs a seven-fold increase by 2020.
The draft legislation is to be presented to the government on June 20, Izvestia daily reports.
Excise duty on filter cigarettes will be raised to 820 roubles ($25) per thousand cigarettes from 550 roubles ($17). The hike will increase the retail price of cigarettes by 50% to an average $3 per pack, the paper calculates.
The excise tax on alcoholic beverages also will increase, the paper reports. It will go up from 9% to 25% on spirits, 14% on wine, and 4% on champagne.
The duties will be raised to equalize taxation of tobacco products with other European countries, the paper reports.
The fight against smoking is the second reason for the increase. If the price is increased, children, adolescents and the poor will either smoke less or move to low-quality tobacco, the paper reports.
In the US, President Barack Obama has proposed to nearly double federal excise taxes to $1.95 on each pack of cigarettes to compensate for the recent drops in revenue paid to state governments that back tobacco-settlement bonds, Reuters reports. A proposed tax increase would boost an average pack price to nearly $7 in the US, the agency calculates.