Category: Taxation

  • Tobacco Sales Boost Luxembourg Budget

    Tobacco Sales Boost Luxembourg Budget

    Image: alexlmx

    Luxembourg’s budget will be boosted by millions of additional euros in tax revenue due to higher than anticipated tobacco sales this year, reports The Luxembourg Times.

    The government expects cigarette sales to be around 6 percent higher than originally forecast in the 2024 budget, meaning that the state could reap a total of €700 million ($763 million) alone in additional excise duties. Including all taxes, the sale of tobacco products this year is expected to generate a total of €1.4 billion for the public purse.

    The direct benefit to the government’s finances from tobacco sales is expected to increase to €1.6 billion next year and €1.9 billion in 2028.

    Luxembourg will increase excise duties on tobacco products by a further 5.5 percent from next year, Finance Minister Gilles Roth said in his budget speech last week.

    While the tax increase raises the cost of the cheapest packet of cigarettes from €5.20 to €5.50, Luxembourg remains one of the cheapest places to buy cigarettes in Western Europe.

    A pack of 25 cigarettes currently costs €8 in the Grand Duchy compared with €10 in the Netherlands and €13 in France.

    Meanwhile, revenue from new nicotine products is “difficult to estimate” for 2024, a finance ministry spokesperson said. According to initial figures, around €1 million has been collected in taxes on these products between May and September.

    Overall excise revenue across all sectors is expected to hit €2.4 billion in 2025, up from €1.89 billion just three years previously.

  • Indonesia Keeps Tax Rates

    Indonesia Keeps Tax Rates

    Photo: Taco Tuinstra

    Indonesia’s finance ministry confirmed that the country’s tobacco excise rate will remain unchanged for 2025, reports Tempo.

    “Pending the finalization of the 2025 State Budget, the government has decided to maintain the current policy,” said Askolani, director general of customs and excise at the finance ministry, during a press conference on Sept. 23.

    According to Askolani, the government will continue to explore alternative policy options, including potential price adjustments at the industry level, to discourage smoking. Furthermore, the government will evaluate the price discrepancies between the three main cigarette categories—hand-rolled kreteks, machine-made kreteks and “white cigarettes”—which have contributed to downtrading.

    As of Aug. 31, 2024, Indonesia has collected IDR138.4 trillion ($9.1 billion) in excise revenue, representing a year-on-year growth of 5 percent. This increase was fueled in part by increased production of hand-rolled kreteks and machine-made kreteks.

  • Indonesia Keeps Tax Rates

    Indonesia Keeps Tax Rates

    Photo: Taco Tuinstra

    Indonesia will maintain excise tax rates for tobacco products at their current levels next year, reports The Star.

    According to a finance ministry official, the country will consider other policies, including changes in retail prices, to discourage smoking.

    “We won’t adjust the rates next year, but we will look for other alternative policies, including adjustment in retail prices,” said Askolani, director general of customs and excise at the finance ministry.

    Indonesia raised excise tax rates for tobacco products by an average of 10 percent each year in 2023 and 2024 in an effort to control cigarette consumption.

    According to a health ministry survey in 2023, Indonesia had 70 million smokers among its 280 million people. It said 7.8 percent of smokers were between the ages of 10 to 18.

  • Indonesia Urged to Raise Tobacco Taxes

    Indonesia Urged to Raise Tobacco Taxes

    Photo: Taco Tuinstra

    An Indonesian health ministry official has recommended higher cigarette taxes to deter consumption, reports the Antara news agency. Cigarettes are cheaper and more easily accessible in Indonesia than they are in many comparable countries.

    “The urgency of increasing the excise is to prevent the public from easily obtaining cigarettes with a cheap price in Indonesia,” Benget Saragih, a member of the ministry’s working team for tobacco disease control, was quoted as saying.

    Nearly 38 percent of Indonesia’s 270 million people smoke—a much higher share than in neighboring countries such as Singapore. With this figure, Indonesia ranks 13th in the world in terms of cigarette consumption, Saragih said.

    The number of deaths caused by cigarette consumption has reached 8 million per year, according to Saragih. Seven million of the deaths are due to active smoking and the remaining 1.2 million due to passive smoking, he added.

  • Tax Hike Sparks ‘Chaos’ in Jordan Market

    Tax Hike Sparks ‘Chaos’ in Jordan Market

    Photo: Rodworks

    Jordan’s recent tobacco tax hike has sparked turmoil in the market, reports Roya News.

    Smokers reported price differences of JOD1 ($1.41) or more for the same brand across various shops. Some suspect traders have been exploiting the tax increase to boost their profits.

    Critics are urging the government to standardize prices.

    On Sept. 12, the government approved an amended special tax system for 2024, adjusting tobacco taxes to align with the national strategy to discourage tobacco use.

    The revision aims to curb the spread of electronic smoking devices, particularly among children, and to address the disparities in taxes between traditional cigarettes and their alternatives.

  • Cigarette Seizures up in the Netherlands

    Cigarette Seizures up in the Netherlands

    Photo: think4photop

    The number of illegal cigarettes seized in the Netherlands to date this year has already reached the volume confiscated in all of 2023, reports DutchNews.

    Customs and finance ministry investigators seized 120 million illegal cigarettes since the start of 2024. The biggest haul so far this year was made in Rotterdam, where officials found 27 million cigarettes, which would have generated €6 million in tax had they been legal.

    In July, customs officials confiscated 8 million illegal cigarettes in Someren. That same month, they seized 6 million cigarettes and 4.5 tons of rolling tobacco in Rotterdam.

    Critics attribute the increase in seizures to rising prices. In April, the price of a packet of 20 cigarettes rose to around €11 in the Netherlands, encouraging more smokers to source their tobacco abroad.

    In a 2023 empty pack survey, a quarter of cigarettes had avoided Dutch tobacco duties, up from 15 percent in 2021.

    While nearly 19 percent of the cigarettes had been bought abroad, 4 percent were either fake branded cigarettes or had been smuggled. Two years previously, just 1 percent were either fake or illegal.

    Research by the public health institute RIVM indicates that smokers buy around 10 percent of their tobacco abroad.

  • Price Hikes Fuel Smuggling

    Price Hikes Fuel Smuggling

    Photo: igorkol_ter

    Recent tobacco price hikes in the Netherlands have prompted smokers to source their tobacco abroad, reports Turkiye Today.

    On April 1, the Dutch government increased a special consumption tax, causing the price of a 20-stick pack of cigarettes to rise by €1 ($1.11) to more than €11. By comparison, a similar pack sells for €8.93 in Germany and €6.50 in Belgium. In Luxembourg, which is among the cheapest countries for smokers in western Europe, a pack of 20 cigarettes sells for €5.07.

    Many Dutch smokers have also started sourcing their cigarettes in Turkiye, where tobacco products are frequently offered for less than half of the price in the Netherlands.

    The Netherlands permits travelers to import a maximum of 800 cigarettes from EU countries. For cigarettes obtained outside of non-EU countries such as Turkiye, the duty-free limit is 200 cigarettes.

    Earlier this month, Dutch lawmakers expressed concern about dwindling tax receipts as legal tobacco consumption plummets in the wake of the higher tobacco duties.

  • ‘Excessive Tax Hike Could Spur Illicit Trade’

    ‘Excessive Tax Hike Could Spur Illicit Trade’

    Photo: Taco Tuinstra

    Indonesia’s above-inflation tax hike could fuel illicit trade and depress government revenue collections, according to Apindo, a leading employers association, reports Tempo.

    To discourage smoking, the government last year approved a 10 percent increase in excise taxes on cigarettes for 2023–2024.

    Despite the tax hike, the number of cigarette factories has increased significantly in Indonesia. Data from the Directorate General of Customs and Excise revealed a surge from 1,214 factories in early 2022 to 1,723 factories in June 2024.

    Meanwhile, Statistics Indonesia (BPS) reported a 28.62 percent smoking rate among Indonesians aged 15 and above in 2023. The largest number of smokers was reportedly in the 35–39 age group at 35.21 percent while the youth group (15–19 years) had a rate of 9.62 percent. The Health Ministry’s 2023 Indonesian Health Survey found 70 million active smokers, including 7.4 percent aged 10–18 years.

  • Maldives: Call for Higher Tobacco Taxes

    Maldives: Call for Higher Tobacco Taxes

    Photo: Kalyakan

    The Maldives’ Health Protection Agency (HPA) has recommended higher taxes to deter tobacco use, reports The Edition.

     In an article published on the Ministry of Health website, the HPA expressed concern over the increasing use of e-cigarettes and nicotine pouches among teenagers and youth.

    According to a 2021-2022 survey, some children in the Maldives begin using tobacco as young as eight years old.

     The Maldives spends MVR1.8 billion ($116,896) annually to import 400 million cigarettes. Significant amounts are also spent on importing e-cigarettes and shisha tobacco, according to the HPA.

    The agency called for further restrictions on tobacco advertising and marketing, along with bans on public smoking to reduce exposure.

  • New Zealand Reserves Funds for HTP Tax Cut

    New Zealand Reserves Funds for HTP Tax Cut

    Photo: Rochu_2008

    The government of New Zealand will set aside NZD216 million ($127.39 million) to pay for tax cuts on heated tobacco products (HTPs), reports Radio New Zealand.

    Earlier this month, Associate Health Minister Casey Costello announced a 50 percent cut to HTP excise taxes, arguing that doing so would encourage cigarette smokers to migrate to less unhealthy nicotine products.

    A paper released on the health ministry’s website shows the Cabinet agreed in May to set aside NZD216 million to cover the estimated lost revenue.

    Philip Morris International, which owns the bestselling HTP product in New Zealand, has long argued that tax levels should reflect the relative risk levels of tobacco products.

    However, the Cabinet paper noted it was unclear whether the tax break would be passed on to consumers due to the monopolistic nature of the market.

    Costello said that she expected the industry to reduce the cost of its heating products. “I’m expecting the excise reduction to pass to consumers; this is what we were advised would happen by officials and it is something we will also be monitoring,” she was quoted as saying.

    New Zealand tax authorities collected NZD3.62 million in 2022 and NZD5.97 million in 2023 from HTPs.

    Earlier this year Costello scrapped laws that would have slashed the number of tobacco retailers, removed 95 percent of the nicotine from cigarettes and aimed to create a smoke-free generation by banning sales to those born after 2009.

    Critics have expressed concern about links between the tobacco industry and Costello’s New Zealand First party. Two senior corporate communication positions at PMI are held by people who previously held senior roles in the New Zealand First.