Moscow May Tax Alcohol for Medical Purposes Because So Much of It is Being Diverted to Produce Untaxed Liquor and Costing Government Revenues

Paul Goble

            Staunton, Nov. 10 – More than 40 percent of alcohol ostensibly intended for use in medical institutions and now untaxed may soon be subject to excise taxes as a means of decreasing the more than 40 percent share currently being diverted for use in drinks and to boost Russian government revenues, according to RBC.

            The decision to take this radical measure has not yet been finalized, but it is gaining support because of the findings of a joint FSB-Federal Tax Service investigation that has concluded that only by taxing all alcohol can the diversion of untaxed medical alcohol be stopped and tax revenues boosted (rbc.ru/economics/10/11/2023/654a40979a794738809f9ca4).

            The latter almost certainly is the more important factor; but there are concerns that taxing alcohol intended for medical use will hurt hospitals and patients and that some means needs to be found to subsidize them to compensate for taxes that may be imposed on a good they have currently paid less for because it has not been taxed.