Excise on fuel, alcohol and tobacco will remain important budget revenue in 2018

The Finance Ministry has published a draft amendment to the Tax Code for 2018, which provides for changes in excise rates for excisable goods. Businesses and business unions have failed in reintroducing the principle of VAP payment upon payment. Only alcohol producers would apply this rule. Taking into account the gradual increase in excises for motor fuel in 2018 by 10%, these costs, if introduced, would be transferred onto the consumer as a price increase. This is unlikely to have a significant impact on demand for fuel from legal entities and individuals. A further increase in excise duty on tobacco would raise domestic prices on cigarettes and gradually decrease tobacco consumption by the population. Alcohol is unlikely to increase in price due to the pressure from Russian producers and only a slight increase in excise duty. In January-May 2017, excise duty was responsible for BYN 928 million or 5.5% of budget revenues. Through a possible increase in excise duty in 2018, the state demonstrates the unwillingness to reduce its share in budget revenues.