Azerbaijan has increased taxes on cigarettes and cigarillos, according to local reports.
The excise rates for cigarillos went from AZN43 ($25.20) per 1,000 pieces to AZN45.5 per 1,000 pieces.
Excise rates for cigarettes jumped from AZN46.5 per 1,000 pieces to AZN53.5 per 1,000 pieces.
The new resolution will come into force 30 days from the date of its publication.
The tobacco tax proposed in Bangladesh’s 2024–2025 budget will make tobacco products cheaper and more affordable, according to critics.
According to the Daily Sun, health groups believe the proposal will encourage youth to use tobacco products, leading to an increase in tobacco-related deaths and illnesses. “Consequently, government expenditure on public health will rise,” the PROGGA and ATMA health groups wrote in a statement. “The proposed budget will also result in the government losing the opportunity to earn an additional BDT10,000 crore [850.44 million] in revenues.”
The statement notes that the retail price increase is minimal. “This means the hike per stick is only BDT0.50 (11.11 percent). The supplementary duty has been raised by 2 percent from the existing 58 percent to 60 percent.”
“It should be noted that, very recently, the third report of Tobacconomics Cigarette Tax Scorecard has revealed a grim picture of the affordability of cigarettes in Bangladesh. Bangladesh scored 1.13 out of 5. The country’s score in the previous report was 2.38,” the statement said.
“The retail price as well as the [supplementary duty] imposed on the low-tier cigarettes, which holds 75 percent of cigarette market share, has seen a very negligible change. We demand that the government set the retail price at least BDT60 and [supplementary duty] 63 percent so that it reduces the affordability of cigarettes, safeguards the youth and increases the revenue of the government manifold,” said PROGGA Executive Director ABM Zubair.
Pakistan’s 2023 federal excise duty (FED) hike on tobacco products has diverted rather than reduced cigarette consumption, reports The News International, citing recent research.
In 2023, the government announced a significant cigarette tax hike, prompting tobacco companies to more than double their cigarette prices.
The fiscal measure aimed to boost revenue and discourage smoking. However, a recent study conducted by the Lahore University of Management Sciences (LUMS), suggests it has achieved neither objective.
Instead of lowering smoking rates, the increased prices have prompted consumers to source their cigarettes from informal sources, a development that will likely cause the government to miss PKR300 billion ($1.08 billion) in tax earnings this year, according to LUMS.
The LUMS study found that the share of duty-paid cigarettes shrank to 42 percent over the past two years.
“Government has implemented various initiatives to address the extent of illicit sector to bring more companies and illicit sector under tax net,” said LUMS Associate Professor of Economics Kashif Zaheer Malik. “These, however, have not been successful in reducing illicit trade in Pakistan.”
In light of Pakistani smokers’ profound price sensitivity, the LUMS report urged the government to reconsider its excise tiers. It also said the success of Pakistan’s track-and-trace system would depend on an all-encompassing rollout and consistent enforcement.
Only a handful of Pakistan’s cigarette manufacturers have implemented the new system.
In related news, the government of Pakistan’s Khyber Pakhtunkhwa (KP) province announced a 400 percent tobacco tax increase.
Civil society groups welcomed the measure. “This substantial increase is projected to generate over PKR2 billion annually, which will be dedicated to enhancing health facilities across KP,” Blue Veins and the Provincial Alliance for Sustainable Tobacco Control wrote in joint statement.
Tobacco growers warned the tax hike would destroy the sector. “The farmers can’t afford this and will stop growing tobacco,” Pakistan Tobacco Board member Rustam Khan was quoted as saying by The News International.
“Tobacco crop is the only cash crop of the province. And around 1.2 million people in the province depended on it,” said Khan, adding that more than 75,000 farmers were involved in tobacco cultivation.
Tobacco taxation has been a contentious topic in Pakistan recently. In May, market leader Pakistan Tobacco Co. threatened to cease operations in the country if the government further increases cigarette taxes.
Pakistan’s Walton Tobacco Co. has called on the Azad Jammu and Kashmir government to reopen the company’s offices, alleging that the company has been illegally sealed before Eid-ul-Fiter, the Muslims’ largest religious festival, reports Business Recorder. The closure has resulted in sudden unemployment for more than 400 employees.
“We urge the authorities to immediately open the company and restore livelihoods of hundreds of workers,” said Arif Zia, spokesperson for the Walton Tobacco Co.
“We are doing business and paying taxes for the last 18 years,” said Zia, adding that the company is the highest taxpayer in Kashmir. The company stated that it had been illegally raided, products had been seized, and they were threatened with serious consequences by the authorities.
According to the manufacturer, authorities in Azad Jammu and Kashmir did not issue any “show cause” notices to the company or conduct income tax audits before suddenly sealing all the offices.
“We will be forced to relocate businesses elsewhere if this trend continues,” the tobacco company said, noting that the government is conducting enforcement action as a show and that law enforcement has not taken any action against illegal cigarette sales.
Law enforcement seized the company’s trucks during transportation rather than at excise check posts; the company is allegedly missing 200 trucks.
Kazakhstan’s Ministry of National Economy wants to introduce excise taxes on high-end cigars and other luxury items, reports The Times of Central Asia.
The goals of the new taxes are “to equalize the socioeconomic situation of different segments of the population, to increase the nation’s revenue and to regulate consumption of certain goods,” according to the ministry.
In its proposals, the ministry acknowledged that potential reductions in consumption of the impacted luxury goods, along with the cost of administrating the new taxes, might offset any additional income generated.
The new amendments are also forecast to harmonize excise on general tobacco. Current legislation already provides for a gradual increase in excise taxes on cigarettes, which are due to reach $30.6 1,000 cigarettes this year.
The ministry’s document is publicly available for discussion until March 27, with the new tax code expected to be adopted in October of this year.
Hong Kong will hike the duty on cigarettes by HKD0.80 ($0.10) per stick, pushing the price of a pack of 20 cigarettes to HKD94, reports The Standard. The duty on other tobacco products will be increased by the same proportion.
Currently, a pack of cigarettes costs HKD78 after a 25.8 percent increase last year.
Finance Minister Paul Chan Mo-po expects the proportion of tobacco duty in the retail price of cigarettes to rise to about 70 percent, gradually approaching the 75 percent level recommended by the World Health Organization.
Chan believes this will provide the public with a greater incentive to quit smoking. He said the government will step up enforcement against illicit cigarette trading and strengthen smoking cessation services, publicity and education.
The Coalition on Tobacco Affairs expressed regret over the government’s decision to increase tobacco taxes without disclosing how last year’s price hike impacted the prevalence of smoking.
The coalition said the prior-year increase had exacerbated illicit cigarette activities with customs seizing a record-high 650 million cigarettes in 2023.
“This indicates how syndicates take advantage of Hong Kong’s high tobacco tax policy to control the sale of illicit cigarettes with the aim to provide funding to other criminal activities,” the coalition said in a statement.
The government of Ireland is working to introduce a tax on e-cigarettes in 2025, reports The Irish Times.
Finance Minister Michael McGrath confirmed that his department had started work with the revenue department to announce the tax in the next budget and introduce it next year.
McGrath cited the vaping industry’s “insidious” targeting of e-cigarettes toward young people as justification for the tax.
“There’s no doubt, but it is a deliberate policy,” he was quoted as saying. “In my mind, what is happening when you see all the attractive flavors and names, it’s definitely targeting young people and very successfully.”
While acknowledging that e-cigarettes are helping some smokers quit more harmful combustible cigarettes, McGrath also noted that there are many unknowns about the long-term effects of e-cigarettes.
He said it was important for the Department of Finance’s proposed tax to align with policies of other departments around e-cigarettes and vapes, such as the Department of Health and the Department of Environment.
The Bangladesh Economic Association (BEA) has proposed a 70 percent tax on all types of cigarettes and tobacco, according to The Business Post.
By setting the tax as such, the BEA estimates that smoking will decrease by about 66 percent and the state will generate BDT17 billion ($154.89 million) in revenue.
The BEA submitted the proposal to the National Board of Revenue during the pre-budget discussion. According to the BEA, the 70 percent duty would increase cigarette prices by an average of 130 percent.
The Hong Kong Council on Smoking and Health (COSH) has called on the city’s government to increase the tobacco tax by at least three quarters in the 2024-2025 budget, reports the South China Morning Post.
Such a raise would bring the levy in line with the World Health Organization’s recommendation for taxes to account for 75 percent or more of cigarettes’ retail price. The proposed tax hike will push up the cigarette retail price to about HKD115 ($14.70) per pack, a potential tipping point for many smokers to consider cessation.
The move will also help Hong Kong achieve its goal of reducing smoking prevalence to 7.8 percent by 2025, according to the COSH. The smoking prevalence in Hong Kong was 9.5 percent in 2021.
COSH also advocates for an automatic tax increase mechanism for future annual tax hikes, adjusted to counteract the effects of inflation and income growth, and avoid the tax’s proportion in the overall retail price of cigarettes being decreased by industry price hikes.
According to the COSH, raising the tobacco tax requires the least implementation costs and enforcement resources, and the shortest time for legislation and implementation, while delivering the quickest and most significant results.
Thailand’s excise department is considering whether it should implement a single tax rate or a weight-based tax for cigarettes, announced Ekniti Nitithanprapas, excise department director-general, reports Thaiger.
The current tax structure is a two-tier system with a 25 percent tax applied to cigarette packs that retail up to THB72 ($2). This structure is aimed at reducing the impact on low-income consumers. Cigarette packs that retail higher than THB72 are taxed at 42 percent. An additional flat rate tax of THB1.25 per cigarette is also applied regardless of retail price.
The current system has led to manufacturers selling cigarette packs for THB72 to avoid higher tax rates.
If a single rate is decided upon, it would fall between 25 percent and 42 percent.
In October 2021, a 40 percent flat tax rate was set to be implemented but the tobacco authority and tobacco farmers opposed the move due to the potential impact of the tax rate on both parties.
The finance ministry has been tasked to study the cigarette tax structure for the medium-term and the long-term to determine a fair and appropriate single-tier tax rate.