Excise Stamp Chaos Stalls Import of Tobacco, Alcohol

Imports of alcohol and tobacco to Russia have ground to a virtual halt over the government's plan to impose excise taxes from the beginning of the year, according to company officials who are complaining that implementation of the taxes has been chaotic.


In the wake of the complaints, the Russian government has extended the deadline for excise stamps to be placed on imported alcohol until Feb. 1 and for tobacco for a further month.


The State Trade Inspectorate plans to launch raids on retail stores starting next month to check for excise stamps, Galina Belova, head of the inspectorate's trade department, said Monday in an indication that her office believes imports are continuing.


The government gave ample notice of the new excise stamp requirements, announcing the move last April, but apparently importers did not think the move would be implemented. Now that the government has carried out its plans, importers complain they are forced to apply stamps individually to each bottle or pack of goods already in transit.


The excise tax on cigarettes is 30 percent while tax on alcohol ranges from a high 1.32 ecu (about $1.60) per liter of sparkling wine to 0.12 ecu for vermouth.


Vladimir Geller, an official at the Smolensk customs point, said in a telephone interview from Smolensk that the number of trucks dropped by 50 percent since the stamps were introduced.


He said that his point had turned back 24 trucks with alcohol that bore no excise stamps in the first 10 days of the month. He said no goods bearing excise stamps had crossed the border since the beginning of the year.


Demonstrating the confusion reaped by the new regulations, an official at Wente Brothers said shops had refused to accept the company's wine that had been imported in 1994 and therefore was exempt from the tax.The official, who spoke on condition of anonymity, explained that shops were wary that they would not have sold wine by Feb. 1 and then would have to buy excise stamps at their own expense.


"It is very bad for us," she said, adding that the company intended to buy stamps. "We are losing time and we are losing money."


But Yelena Tsvetkova, head of the VAT and Excise-Tax Collection Department of the State Customs Committee, characterized the situation as "normal" and said that a lot of companies had applied for stamps.


"We are piled up with orders for stamps from companies," she said, but refused to mention how many stamps the committee had already sold.


Excise stamps were introduced as of Jan. 1 to boost tax collection and to cut smuggling under a plan agreed upon with the International Monetary Fund. However, companies are reluctant to buy them, claiming that the regulation is unclear and being poorly implemented.An official at France's Remi Martin said that the customs point at Smolensk on the border with Belarus had turned back three of its trucks.


He said the firm was considering whether to send the trucks back to France and to have personnel there stick stamps on every bottle, or to sell the merchandise to a client in Kazakhstan, which does not require excise stamps.


"The excise stamps idea is a good one," said the official, who asked not to be named, "but it is implemented very unprofessionally. That is why we are going through very difficult months."


He said that order was the only one his company had received for 1995, and other clients were scared off by the rule.


Sergei Kuptsov, president of Moscow Cash & Carry Mozhaisk wholesaler, said that his company had indefinitely suspended purchases of goods requiring excise stamps.