Category: Taxation

  • Russia hikes taxes

    Russia hikes taxes

    The Russian government has raised the excise duties on tobacco products, reports TASS news agency.

    Excise taxes on cigarettes and unfiltered cigarettes have increased to RUR1,966 ($31.80) per 1,000 sticks plus 14.5 percent of estimated cost calculated on the base of the maximum retail price, with a minimum of RUR2,671 per 1,000 sticks.

    The excise duties on cigarillos, beedis and kreteks have risen to RUR3,055 per 1,000 items from RUR2,938 per 1,000 items.

    Cigars they have seen an increase from RUR207 to RUR215 per item.

    Pipe tobacco, smoking tobacco, chewing tobacco, snuff tobacco and shisha tobacco are now taxed at RUR3,172 per kg, up from RUR3,050 per kg.

    The excise on heated tobacco and heated tobacco products has increased to RUR6,040 per kg from RUR5,808 per kg.

  • Turkey shelves tax hike

    Turkey shelves tax hike

    Turkey will refrain from hiking tobacco and alcohol taxes in the first half of 2020, reports Reuters.

    The tax increase is generally imposed automatically each year in line with producer price inflation. But Turkey’s Official Gazette published a presidential decision saying it would not be implemented in the first half.

    Economists said the move would curb inflation, which tumbled throughout 2019 from multi-year highs in the previous year. Meanwhile, the impact on the budget is expected to be limited. BCG Partners estimates the loss of revenues for the central government would be around 0.1 percent of gross domestic product.

    Last week Turkey raised the minimum wage to put more money into consumers pockets.

  • BAT cleared of tax-evasion charges

    BAT cleared of tax-evasion charges

    A South Korean court has acquitted British American Tobacco (BAT) from charges of tax evasion, citing lack of evidence, reports Yonhap News Agency.

    In April, prosecutors indicted BAT Korea and two senior executives on charges of evading KRW50 billion ($43 million) in taxes by falsely reporting a cigarette shipment on Dec. 31, 2014, one day before a cigarette tax hike went into effect.

    Prosecutors accused the cigarette company of earning an illegal profit of KRW50 billion by selling the 24.63 million packs taxed at a pre-hike rate to consumers at post-hike prices.

    But the Seoul court said it was unable to conclude from the evidence submitted by the prosecution that BAT intentionally committed the false shipment report.

    “In addition, any motivation for tax evasion has not been found and it seemed that company employees didn’t perceive the concerned shipment report via computers as an illegal act,” the court said.

     

  • PM Fined for Tax Evasion

    PM Fined for Tax Evasion

    Thailand’s Criminal Court on Nov. 29 fined Philip Morris (Thailand) THB1.2 billion ($39.63 million) for evading taxes.

    Filed by the Office of the Attorney General (OAG) in January 2016, the lawsuit charged Philip Morris with evading taxes by under-declaring the value of cigarettes it imported from the Philippines from 2003 to 2006.

    According to the OAG, Philip Morris set the price of imported L&M cigarettes at THB5.88 while other importers declared the same brand of cigarettes at THB16.81 per pack. The firm also declared the cost, insurance and freight rate on Marlboro from the Philippines at THB7.76 per pack, lower than the THB27.46 reported by other importers.

    The under-declaration cost the government more than THB20 billion in tax collections, according to the complaint.

    Philip Morris denies the charges.

    Gerald Margolis, Philip Morris International’s managing director for Thailand and Indochina, said the company will appeal the case, citing an earlier World Trade Organization ruling that Philip Morris (Thailand) had followed Thai laws related to prices and import tax declaration.

  • Engaging in Dialogue

    Engaging in Dialogue

    Ukrainian President Volodymyr Zelensky met with representatives of the country’s largest tobacco manufacturers in Ukraine to discuss the challenges facing their business.

    “The growth of investment into the economy of Ukraine is important for us as it is an increase in the number of jobs and tax revenues,” Zelensky said.

    Tobacco companies are among Ukraine’s largest taxpayers, according to Zelensky. In the past nine months, the government collected almost UAH30.5 billion ($1.24 billion) in tobacco revenues, up 7.5 percent over the same period in 2018.

    Zelensky stressed the importance of improving the business climate and ensuring the predictability of regulations in Ukraine, adding that combating monopolies and building competitive markets was also a priority.

    In October, Ukraine’s competition watchdog fined cigarette manufacturers and a distributor UAH6.5 billion for anti-competitive behavior, according to Interfax Ukraine.

    The Anti-Monopoly Committee said the country’s leading tobacco companies and their common distributor, TEDIS, had conspired to keep new businesses from entering the market.

    Some tobacco companies have been mulling over the transfer of their offices and shutdown of operations.

  • Farmers Decry Tax Hike

    Farmers Decry Tax Hike

    Indonesian tobacco farmers say demand for their leaf has declined ahead of tax and price hike schedule for 2020, according to a report in Tempo. 

    The government plans to raise the cigarette excise rate by 21.56 percent on average and the cigarette retail selling price by 35 percent next year.

    Agus Setiawan, deputy secretary general of the Indonesian Tobacco Farmers Association, asked Presidential Chief of Staff Moeldoko to revisit the plan.

    The Finance Ministry’s Customs and Excise Director-General Heru Pambudi said the government was prepared to share its cigarette excise revenues with tobacco farmers, by returning a part of the take through regional governments.

    Source: Tempo

  • Temporary reprieve

    Temporary reprieve

    Thailand’s excise department will temporarily reduce a tobacco tax from THB0.10 ($0.003) to THB0.03 per gram for one year, starting Jan. 1, 2020.

    The move follows complaints from tobacco farmers that the THB0.10 rate, which was introduced on May 7, was taking a toll on their incomes.

    Earlier, the excise department postponed a 40 percent tax hike by one year to Oct. 1, 2020.

    The temporary tax cut applies only to farmers who produce fine-cut tobacco and those with an annual production up to 12,000 kg

    Thailand has 10,450 tobacco growers, of whom 15 have production capacity of more than 12,000 kg a year.

    The May 7 tax hike was intended to narrow the price gap between factory-made and hand-rolled cigarettes, after many smokers switched to rolling their own tobacco.

  • Referred to court

    Referred to court

    The European Commission has referred Hungary to the EU Court of Justice for failing to apply the minimum EU excise duty on cigarettes.

    Hungary’s lower duties distort competition with other member states and are at odds with EU health protection policy, according to the Commission.

    EU rules require member states to charge a cigarette excise duty of at least 60 percent of the applicable weighted average retail price of cigarettes and not lower than €90 per 1,000 cigarettes.

    Hungary was allowed a transitional period until Dec. 31, 2017, to gradually increase the cigarette excise duty and reach the required minimum threshold.

    The country has raised the excise tax on cigarettes in three increments since Sept. 1, 2018. Since July 1, 2019, the tax has been HUF19,200 ($63.63) per 1,000 cigarettes plus 23.5 percent of the retail price, but at least HUF 32,200 per 1,000 cigarettes.

  • Revenue target exceeded

    Revenue target exceeded

    The Philippines collected PHP8.1 billion ($156.9 million) in tobacco excise taxes during the first half of 2019, 32.8 percent more than the government’s target, reports The Philippine Star.

    The Department of Finance attributed to better-than-expected collections to improved compliance as the government continues to crack down on illicit tobacco trade.

    In July 2018, the Philippine government increased the excise tax on tobacco products.

  • Gold pot found

    Gold pot found

    The government of Ireland has increased the excise duty on a pack of 20 cigarettes by €0.50, reports The Irish Post. An average pack now costs €13.50 ($14.82).

    Smokers’ lobby groups derided the price increase. John Mallon, spokesperson for the group Forest Ireland, described the increase as a “massive own goal” by the government.

    “Ireland is already the most expensive country in Europe to buy tobacco,” he said.

    The announcement has been celebrated by the Irish Cancer Society, however, which says that sharp increases in the cost of tobacco is the most effective way of getting people to quit.