Translated material
Reject without taking a bite
The Ministry of Finance recognized the state monopoly on alcohol turnover as non-market and criminal
The idea of introducing a state monopoly on alcohol circulation has acquired new opponents. The Ministry of Finance prepared a draft government report in response to the Accounts Chamber's proposal to establish a state monopoly on alcohol circulation. According to the Ministry of Finance, the state monopoly will not solve the problems of surrogate alcohol consumption, but will require significant budget expenditures and may lead to an increase in the volume of illegal products.Earlier, the head of the Accounts Chamber, Sergei Stepashin, said that the bulk of vodka in Russia is produced illegally and to combat illegal vodka it is necessary to introduce a state monopoly on the sale of ethyl alcohol. The chamber sent its proposals for review to officials of interested departments, including the Ministry of Finance, the Ministry of Economic Development, the Ministry of Internal Affairs, the Federal Customs Service and the Ministry of Agriculture. So far, only the Ministry of Agriculture has supported the idea of introducing a state monopoly.
The Ministry of Finance categorically rejected the idea of Mr. Stepashin’s department. According to the financial department, the expected economic and budgetary costs from the introduction of the new system will exceed the expected benefits, and the implementation of the idea of a state monopoly will lead to increased corruption, smuggling and an increase in the share of illegal alcohol and alcohol turnover. As a result, the income of the criminal alcohol business will increase significantly.
According to the Ministry of Finance, with the introduction of a state monopoly on the circulation of ethyl alcohol, the share of income from alcohol excise taxes in the total amount of income could be approximately 2-3%. According to financial department officials, state monopolization has a particularly high effect in conditions of an unstable economy accompanied by high inflation. “However, at present, these prerequisites are absent, and in a market economy, the introduction of a state monopoly, in particular in the sphere of ethyl alcohol circulation, will lead to a limitation of the competitive environment and will not contribute to the provision of economic conditions to stimulate the development of the production of products containing alcohol,” - says a document prepared by the ministry.
In addition, as the Ministry of Finance recalls, quotas for the purchase of ethyl alcohol were in effect until 2006 and were abolished as an ineffective and corruptly dangerous measure of state regulation.
The Ministry of Finance also considered the initiative of its other colleagues to introduce a unified excise tax on alcohol to be detrimental. This proposal was made by the Federal Tax Service, which advocates simplifying the administration of excise taxes. As stated in the report, the current excise tax system provides a list of goods that are exempt from excise taxes. Changing this system and assigning the excise tax by producers of non-excise goods to the cost of purchased ethyl alcohol, according to the Ministry of Finance, will lead to an increase in the price of the final product.
Therefore, the implementation of this initiative could lead to a 40-70 percent increase in prices for medicines, household chemicals, perfumes and cosmetics, the Ministry of Finance is confident.
The draft conclusion of the Ministry of Finance was handed over to Prime Minister Viktor Zubkov. It is expected that the text of the project will be included in the final report, which the prime minister will voice to Vladimir Putin. However, it was the president who came up with the idea of introducing a state monopoly on alcohol two years ago. Then the head of state motivated his proposal by the annual death of 40 thousand Russians from low-quality vodka and surrogates. However, after an unsuccessful attempt to introduce a new EGAIS control system, the launch of which in automatic mode was postponed for an almost indefinite future, the connection between the monopoly on the production of alcohol and the lives of poisoned people was recognized as not obvious. Therefore, in the bowels of the State Duma, the proposals of deputies prepared in May last year to create a certain new state structure - an authorized body to control the volume of production, supply and purchase of alcohol - are gathering dust.