Smoke without fire: Russia will begin to license tobacco sales
The Ministry of Finance has prepared amendments to the Tax Code of the Russian Federation aimed at licensing trade in tobacco and nicotine-containing products. It is expected that the new rule will make it possible to "whitewash" the market and provide the regions with additional income. By purchasing goods at a licensed outlet, the buyer can be sure of the quality and legal origin of the products, experts say. How the licensing procedure will work is described in the Izvestia article.
Confirm the right
The Ministry of Finance has prepared amendments to the legislation on licensing trade in tobacco and nicotine-containing products. This was stated by Alexey Sazanov, State Secretary and Deputy Finance Minister of the Russian Federation. Licenses will be issued for wholesale, retail and delivery trade on the principle of "one retail facility or one vehicle — one license."
The licensing procedure, as specified by the deputy minister, will be phased. The licenses themselves will be issued from March 1 to September 1, 2026. After this period, it will be prohibited to sell tobacco and nicotine-containing products without a license. At the same time, from September 1, 2026 to September 1, 2027, a special transition period will be in effect, necessary to bring retail outlets in line with the new requirements.
Administrative and criminal liability will be provided for the sale of tobacco and nicotine-containing products without a license. Rosalokoltabakcontrol will issue and revoke licenses for wholesale trade. Retail licenses will be provided by the authorized bodies of the constituent entities of the Russian Federation.
Regions will be given the authority to set additional restrictions on retail locations, as well as to increase the size of the minimum area of a retail facility, but not more than twice.
"To obtain (a license. — Ed.) a standard set of requirements is provided, such as the absence of tax arrears in the amount of more than 3 thousand rubles and the payment of a fee. License applicants must also have a store or pavilion with an area of at least 5 square meters. They are owned, managed, operational, or leased for a period of one year or more," Sazanov explained.
In addition, the bill proposes to establish a fee for granting a license for the retail sale of such goods. It will be equal to 20 thousand rubles for each year of the trade license at each outlet. The fee for issuing a license for wholesale turnover, valid for five years, will amount to 800 thousand rubles.
The introduction of licensing is an important step in efforts to restore order in the tobacco market, curb the sale of illegal products and increase tax collection, the press service of the Ministry of Finance told Izvestia.
— This initiative is also important from the point of view of leveling the conditions of competition in the market. Wholesalers and retailers of legal tobacco and nicotine—containing products are expected to improve business conditions by displacing illegal products, which are now distorting the competitive field because they are much cheaper than legal products due to non-payment of excise taxes, the ministry stressed.
Streamline the market
In Russia, the production and turnover of tobacco products are subject to licensing, recalls industrial expert Leonid Khazanov. However, there is no such procedure for retail and wholesale trade yet.
"The introduction of retail licensing will allow us to achieve several goals at once: to replenish the revenues of the Russian budget system, restore order in trade and stimulate the strengthening of the nation's health," the Izvestia interlocutor emphasizes.
The issue of licensing wholesale and retail trade in tobacco and nicotine-containing products has been overdue for a long time, says cigar expert Dmitry Drutsa.
— Thus, the authorities are trying to regulate the market by removing a lot of unscrupulous sellers from it. The new rule will make it possible to clear the market of those who are in the "gray" zone and bring them into the legal plane so that tax collection is higher," he is convinced.
The license is an effective method of combating counterfeiting, agrees Alexander Anfinogenov, an independent expert of the FMCG market. By purchasing goods at a licensed outlet, the buyer can be sure of the quality and legal origin of the products.
Nevertheless, Alexander Khaminsky, a lawyer and head of the Law Enforcement Center in Moscow and the Moscow Region, believes that the proposed measure is excessive.
— The state already has a powerful control tool — the national marking system "Honest Mark". This system tracks the movement of each unit of tobacco products from the manufacturer to the buyer in real time, effectively countering illicit trafficking.
Against the background of the "regulatory guillotine" policy, designed to reduce the administrative burden on businesses, the emergence of a new licensing barrier looks like a step backwards, the Izvestia interlocutor emphasizes.
"The introduction of a license, which is essentially a fiscal levy, seems not so much a measure to increase control as an additional taxation of legal business, which risks raising prices for consumers without achieving the stated goals," warns Khaminsky.
Go into the shadows
The new rules will not cause serious difficulties for sellers, experts agree. However, in the expenditure part of the business, it will be necessary to take into account the cost of the license, says Alexander Anfinogenov. The financial burden can be serious for networks with multiple outlets, warns Alexander Khaminsky.
"Such changes should be introduced in stages, analyzing interim results and possibly making adjustments," the expert is convinced.
The transition period, however, is a significant period of time, sufficient for this, draws the attention of Drutsa.
— In a year, any of the sellers will be able to adequately prepare, either by closing their business or continuing it on new legal grounds. Therefore, difficulties may arise only for those who were engaged in wholesale sales, because this segment has the largest number of unscrupulous suppliers," he believes.
The establishment of a transition period will allow sellers to adapt to the introduced system and determine whether they will continue to sell tobacco or abandon this business, Leonid Khazanov confirms. In the future, this may lead to a reduction in the number of specialized kiosks selling cigarettes and other nicotine-containing products.
At the same time, the bill is largely aimed at removing liquids for vapes and electronic cigarettes and hookah mixtures from the "gray" zone of trade, Drutsa believes.
"The introduction of a transition period is quite capable of segmenting this market a bit, making it more civilized," the Izvestia interlocutor is confident.
At the same time, sellers who initially work outside the legal field will not issue licenses, Khaminsky notes. It is important to understand that the "gray" trading zone will simply go online, the expert points out. And much in this case will depend on the efficiency of law enforcement agencies, which will have to bring unscrupulous sellers to justice.
— Any prohibitions always spur a wave of counterfeiting. And I assume that this crystallization will take place during the transition period, that is, legal licensed activities will exist separately, and in parallel, absolutely incomprehensible origin and quality of nicotine—containing and tobacco products will be distributed on the Internet for some time," Drutsa does not exclude.
However, as the practice of the alcohol market shows, this problem will be successfully solved over time. Ultimately, the implementation of the new initiative will bring the wholesale and retail of tobacco and nicotine-containing products into a civilized, legal framework, predicts the Izvestia interlocutor.
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