Excise tax rise in Georgia

Cigarette prices in Georgia have risen by an average of 50 tetri (US$0.19) a pack following the introduction of a new tax code that came into force on January 1, according to a Georgia Today story.

Since the beginning of the year, the excise tax on a pack of 20 filtered or unfiltered cigarettes has been set at 1.70 lari (100 tetri = 1 lari). Previously, unfiltered cigarettes were taxed at the rate of 60 tetri for a pack of 20.

The tax code amendments have their supporters and opponents. The former hope that the increased excise tax will cut the number of smokers in the country.

Tobacco importers on the other hand say the resulting price rises could increase the number of contraband cigarettes on the market.

However, the head of the Parliament’s Health Committee Akaki Zoidze believes this is unlikely as contraband currently accounts for less than one percent of tobacco products on the market.

He said he hoped the tax increase would “encourage” smokers to quit.

The World Health Organization, he added, had calculated that 35,000 people could be saved from early death during the next 15 years, while the country’s economy would receive a 2.2 billion lari boost.

The story mentioned also that the excise tax increase had been encouraged by the EU.