Kyrgyzstan: Brewers argue new excise stamps on beer bottles may halve the output

Beer production in Kyrgyzstan may fall by 50 percent, representatives of local breweries said at a meeting of the Committee on Budget and Finance of the Parliament, 24.kg reported on April 4.

The industry is strongly opposing the government's initiative on marking of beer with excise stamps. The Cabinet justifies the measure by the fact that due to undocumented beer the state treasury lost over 150 million soms in 2014. By introducing the excise stamps, the officials now intend to return the same amount to the state budget and bring the beer market out of the shadows.

"Sooner or later we will have to introduce this innovation, because all other types of alcoholic beverages are marked with excise stamps in Kyrgyzstan and taxes are paid on them at once, while beer has three weeks delay. It is necessary to fight against shadow economy," the Minister of Economy Arzybek Kozhoshev said at a meeting of the committee.

However, representatives of the Brewers Association opposed the initiative and told the lawmakers that if the production line includes pasting of excise stamps, it will automatically slow down the production chain and the output will be reduced by up to 50 percent. "Taking into account the fact that the beer is bottled at 7-14 degrees, the marking is not possible, all the more so, the beer is not marked in Russia and Kazakhstan," the manufacturers said.

However, MPs advised not to compare local production with other countries. "Do not look at anyone. We should proceed from our own interests, and if it provides an additional income of 150 million soms to the budget, then the law must be introduced," the deputy chairman of the Committee Ziyadin Zhamaldinov (Onuguu-Progress party) said.

At the same time Taalaibek Masabirov (Kyrgyzstan party) asked the Minister of Economy to pay attention to the arguments of brewers. "We should not lose domestic business in the pursuit of additional taxes," Arzybek Kozhoshev warned.

However, the head of the Economy Ministry noted that this innovation technologically is not as complex as it is represented by the manufacturing companies. "In Belarus, Armenia, the beer has long been marked by excise stamps, and we must introduce new technologies, especially since the law does not take effect immediately. There will be adaptation period of 6 months, during which the plants need to bring their production into line with the new legislation," Arzybek Kozhoshev noted and added that domestic enterprises could afford installation of an automatic applicator, which costs $ 5,000, and it will not slow down the production chain in any way.

06 April, 2016