Tougher control on alcohol tax evasion can boost Russian revenues

© Kai Pfaffenbach
Leading Russian senator Valentina Matviyenko is urging the government to get tough on the rules regarding alcohol and spirits tax. According to her, the government is losing billions of rubles every year, and no one is prosecuted.

"We are waiting for the Russian government to implement specific measures to strengthen control over the payment of excise duties on alcohol and spirits. I support those who are in favor of tougher penalties for such crimes that cost budget billions of rubles, while the responsibility for this is pennyworth," Matviyenko said.

According to her, the public purse lost 520 billion rubles (about $8 billion) last year.

"You will agree, the amount is huge. It can be compared to the sum the budget lost when oil dropped to $40 per barrel," she said.

In February, the Russian business daily Vedomosti reported that armed FSB and Federal Tax Service officers raided one of Russia’s biggest vodka bottlers Status Group and several Caucasian liquor producers in a massive tax evasion case.

The 11 Caucasian liquor producers are in the Kabardino-Balkarian Republic. They allegedly used a scheme to avoid paying about 23 billion rubles (about $300 million) in taxes in the region. The damage from illegal vodka is much higher.

Since the 1990's, vodka production has been one of the most dangerous businesses in Russia and has long been suspected of connections to organized crime.