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Español Cigarette taxation: Putin vs. Medvedev
Russian President Medvedev has proposed reducing taxes on company profits from the current 34% to the previous level of 26%. But Putin does not agree and has reminded him that the increase to 34% was necessary to sustain the retirement fund and to modernize the health system.
In Russia a pack of Marlboros costs a little more than one euro, giving the makers a profit that does not reach 500% as in Italy, and the leaders are discussing in public the portion of Big Tobacco’s profits that must go to taxes.
Medvedev has suggested compensating the reduction of taxes on industry’s profits with an increase of the excise on cigarettes. This would lead to price increase in line with the agreement signed between the World Health Organization (WHO) and Russia that undertook to gradually raise the prices of cigarettes to mitigate the impact of tobacco on the public health.
But Putin pointed out that the tax burdens of businesses cannot be unloaded on the citizens. The excises will increase and the consumers will pay more for their cigarettes (that cost very little in Russia) as agreed with the WHO, but it must be clear that this will happen only after the manufacturers have given what is fair for them to give.
The Russian Mafia and the Italian Mafia…
The Italian Government allows Big Tobacco to take away, in total silence and with general indifference, two billion, eight hundred million euro every year… tax-free.
Thanks to simple indirect exchanges with foreign companies, Japan Tobacco does not even fill in a tax report in Italy and this fact does not seem to concern anyone. British American Tobacco, since 2011, has been doing all its manufacturing outside Italy and it will probably follow Japan Tobacco’s example, while Philip Morris “lavishes” a symbolic bit of loose change in taxes, at its discretion.
In Russia, the multinationals have met their match; in Italy, they are the absolute bosses. While Italians amuse themselves with the stir, deliberately created, on low profile criminals like the Casalesi Clan or Toto Riina, the real Mafias take home billions with their cigarettes, pharmaceuticals, banks and gasoline, and they don’t have to explain anything to anyone. Real child’s play….
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