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34 TOBACCO INTERNATIONAL JANUARY/FEBRUARY 2016 F ollowing a decision adopted at the end of 2015, the Eurasia Economic Union (EEU) of Russia, Armenia, Belarus, Kazakhstan and Kyrgyzstan will be seeking to harmonize excise rates on tobacco production among its member states with the goal of destroying the varying tax rates that foster the smuggling of cigarettes within the EEU. The draft agreement intended for 2016 revises the excise rate on cigarettes at EUR 22 per 1,000 pieces or EU 0.44 per pack, and in 2020 will bring that rate to EUR 32 per 1,000 pieces or EUR 0.64 per pack. The initiative has been supported by the representatives of almost all tobacco manufacturers in the region. "We support the harmonization of excise rates on tobacco in EEU," said Alexander Lutyi, the director of corporate affairs of BAT Russia. "The alignment of tobacco taxes would eliminate one of the main causes for the spread of illegal cigarettes in Russia– the price difference with neighboring countries. Now, because of higher cigarette excise taxes, packs of cigarettes in Russia are by 0.5-to-two times more expensive compared with the other countries of EEU. In Belarus, a pack of EEU HARMONIZES EXCISE TAXES Eurasian Economic Union Harmonizes Excise Taxes to Combat Smuggling Strategy revises and levels excise taxes on tobacco products By Vladislav Vorotnikov