Econ Ministry proposing extension of multiplying coefficient in calculating excise for grapes

MINERALNYE VODY. May 3 (Interfax) - Russia's Economic Development Ministry is proposing extending the multiplying coefficient in the calculation of the excise tax deduction for grapes in the North Caucasus district.

"To support grape production, producers of cognac have retained a compensatory mechanism in the form of a grape excise tax deduction. Since the effect of the multiplying coefficient in calculating the deduction ends this year, we are together with the Finance Ministry and the Agriculture Ministry suggesting working on an extension," Economic Development Minister Maxim Reshetnikov said at a meeting with members of the government commission on the socio-economic development of the North Caucasian Federal District, which was held by Prime Minister Mikhail Mishustin in Mineralnye Vody on Wednesday.

"The mechanism is systemic, the mechanism is correct, and we need new vineyards here in order to form a systemic basis for future years," he said.

Reshetnikov said that Dagestan became a pilot region for reinvestment of this deduction in the industry. "This year, businesses plan to allocate 3.5 billion rubles towards development of production and the planting of new vineyards on an area of 330 hectares. We start beginning similar work in Stavropol, Kabardino-Balkaria, North Ossetia," Reshetnikov said.

An excise duty on grapes in Russia was introduced in 2020.

According to the Federal Service for Alcohol Market Regulation, the Russian alcohol industry produced 8.8 million decaliters of cognac in 2022, up 10.5% from 2021.