Industry Concerns Over Romanian Tax Plans

Romania’s finance ministry plans to increase excise duties on tobacco and nicotine products this year in addition to the excise calendar that has already been approved, causing tobacco firms concern, according to The Romania Insider.

“The moderate five-year timetable for increasing excise duty adopted less than 12 months ago should have provided the fiscal predictability needed to combat illicit trafficking,” said Jorge Araya, director of the southeast Europe area for BAT. “It should not be forgotten that illicit trafficking also means decreasing revenues to the state budget, financing criminal networks and uncontrolled access to products that do not meet quality or hygiene standards.”

Excise duty was previously increased in April of this year. Excise duties and cigarette prices in Romania are the highest in the European Union in relation to purchasing power.

Araya argues that the tax increases make smuggling very profitable because cigarettes can be bought in neighboring countries at around half the price of those in Romania.