
Taxes are set to as much as double on tobacco and alcohol products in Russia, a move that is likely to force smokers and drinkers to switch to cheaper products, experts said.
The State Duma (lower house of parliament) adopted amendments to the law on excises, which also affected taxes on jewelry.
The biggest increase - 100 percent - is for tobacco products. Experts from consumer rights and industry groups said the hike will cause many Russians to shift to lower quality cigarettes.
"Because of people's current low purchasing power, they already have to choose goods of lower quality," said Alexander Auzan, the president of the Interrepublican Confederation of Consumers' Societies. "But because of the new increase in taxes, people will be forced to buy even lower quality goods."
Peter Lidov, a spokesman for cigarette-maker Philip Morris, said: "It's clear that bad-quality cigarettes have more tar and worse filters in them. And that can badly influence your health."
Officials said the cigarette tax hike will vary depending on the price of the product.
"Dramatic price increases will affect the most expensive cigarettes, while cheaper ones will add not more than 20 kopeks," Tax Ministry spokesman Vitaly Shevchenko said.
The Duma adopted smaller increases on low-quality cigarettes without filters - 7 rubles per 1,000 instead of the 14 rubles initially proposed - and on so-called papirosy filterless cigarettes - 4.80 rubles per 1,000 instead of 9.8 rubles initially proposed.
Alcoholic beverages are less heavily affected by the new law. Vodka taxes will be increased 30 percent.
Drinkers of beer and low-alcohol beverages will be even less affected. Taxes will be 3 rubles per liter on grape wines, 90 kopeks per liter on beers (up to 8.6 percent alcohol) and 3 rubles per liter on beers containing more than 8.6 percent alcohol.
Shevchenko said price increases would actually be minor and would not push Russians into drinking dangerous "moonshine" products.
"The Tax Ministry and Tax Police conduct regular checks of ethyl alcohol and vodka production and are entitled to revoke licenses of those who fail to match quality indicators as prescribed by the standards. The new excises will boost state budget revenues," he said.
Deputies increased taxes on jewelry by only 5 percent, instead of the 15 percent initially planned. A source from the Russian Jewelers' Association said this would allow the demand for jewelry to remain high enough for the industry to maintain current production levels.
The smaller hike was also praised by the Russian Union of Gold Producers, which said jewelers would be encouraged to maintain or increase gold purchases.