Category: Taxation

  • BEA Proposes 70 Percent Tax

    BEA Proposes 70 Percent Tax

    Image: Dmitry Chulov

    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. 

  • Thailand: Dual Tax Rates Decrease Revenue

    Thailand: Dual Tax Rates Decrease Revenue

    Thailand’s dual cigarette tax rate has led to a decrease in government cigarette tax revenue, according to the Bangkok Post. The decrease is about THB23 billion ($646.8 million), according to Poomjit Pongpanngam, governor of the Tobacco Authority of Thailand.

    The new tax structure has caused sales to drop dramatically. According to Pongpanngam, the finance ministry is likely to restructure the cigarette tax rate to a single tax system; however, illicit cigarettes will still pose a problem because they will still be less expensive.

    Farmers contracted by the tobacco authority have seen a decrease in income due to the low sales of cigarettes. The authority has been buying 50 percent less tobacco from the farmers over the last three years. The tobacco authority recently stated that it plans to use THB1.3 billion for a production subsidy for tobacco farmers.

  • Council Urges Steep Tobacco Tax Increase

    Council Urges Steep Tobacco Tax Increase

    Photo: Krakenimages.com

    Hong Kong’s anti-smoking watchdog has called for a 75 percent increase in tobacco tax to meet international standards, reports the South China Morning Post.

    If the tax rate is increased by 75 percent, the smoking rate could decrease by 0.7 percentage points to 8.8 percent, according to the Hong Kong Council on Smoking and Health. The council added that other control measures would be necessary to bring the city’s smoking rate down to the 7.8 percent goal by next year.

    The call for a tax increase comes before next month’s budget. Last year, the tax was increased 31.5 percent.

    “Raising tobacco tax should be prioritized for achieving the smoking reduction target,” council chairman Henry Tong Sau-chai said at a press conference.

    “[The increase last year] was insufficient to compensate for the price gap caused by the freezing of the tax rate in the previous eight years.”

    The World Health Organization has stated that the tax should account for at least three-quarters of the retail price of cigarettes, meaning Hong Kong would need an increase of 75 percent.

    “[Hong Kong is] in a really good position to reduce prevalence to the point in getting close to what we call the ‘endgame,’” said Hana Ross, an honorary research associate from the University of Cape Town’s school of economics. 

    Forty-one countries, including France, the United Kingdom and Australia, have reached the WHO’s recommended level of tobacco tax.

  • Kiwi Tax Freeze Proposal Gets Backlash

    Kiwi Tax Freeze Proposal Gets Backlash

    Image: Comugnero Silvana

    A proposal to freeze tobacco excise taxes for three years has triggered a fierce backlash in New Zealand, according to Radio New Zealand.

    Associate health minister Casey Costello came under heavy political fire after she suggested temporarily halting tobacco tax increases in consideration of smokers’ socioeconomic backgrounds. Smokers tend to earn lower wages than the population at large.

    Health Coalition Aotearoa co-chairperson Boyd Swinburn said such a move would make tobacco products more accessible.

    “This proposal from Costello to put a three-year freeze on this inflation-adjusted excise tax is essentially meaning that tobacco is going to get relatively cheaper over the next three years, because it won’t be keeping pace with the rest of inflation,” he said.

    Swinburn called on Prime Minister Christopher Luxon to take action.

    “The Health Coalition is calling for [Costello] to be replaced as an associate minister of health, given all these policies she’s come out with which are really supporting the tobacco industry’s position.”

    Action on Smoking and Health Director Ben Youden said the Costello’s proposal did not make much sense.

    “Given the finance minister has stated last year that tobacco tax is an important revenue, it seems odd that a freeze on excise tax would be on the table.”

    Asthma and Respiratory Foundation NZ chief executive Letitia Harding called Costello’s proposal “outrageous,” adding that it amounted to another win for the tobacco industry.

    The current coalition government has been criticized for tobacco-friendly policies. One of the first actions upon taking power in late 2023 was to ditch the country’s controversial generational tobacco ban.

  • Support for Indonesian Vape Tax

    Support for Indonesian Vape Tax

    Image: Deacon docs

    The Indonesian Consumers Foundation (YLKI) expressed support for a recently implemented tax on e-cigarettes, reports Tempo.

    The new tax took effect Jan. 1 and aims, in part, to discourage e-cigarette use. Vaping prevalence in Indonesia increased from 0.3 percent in 2011 to 3 percent in 2021, according to the Global Adult Tobacco Survey. The prevalence of cigarette smoking among adolescents aged 13-15 years increased by 19.2 percent over the same period.

    Previously, the Indonesian National Vape Association (Pavenas) asked the Finance Ministry to postpone the implementation of the tax on e-cigarettes. Secretary General of the Indonesian Personal Vaporizer Association (APVI), Garindra Kartasasmita, said that the combination of the tax and the excise tax hike would be a heavy blow to entrepreneurs, consumers and industry players.

    “This needs to take into consideration that the e-cigarette industry is a relatively new industry, and most of the industry players are from communities and MSMEs [Micro, Small & Medium Enterprises],” Garindra said in a statement published ahead of the tax.

     YLKI chairman Tulus Abadi rejected industry assertions that  vaping can help smokers give up of conventional cigarettes. “On the contrary, people will get double health burden due to the use of electronic cigarettes,” he said.

  • Russian Duma Supports Move to Digital Labels

    Russian Duma Supports Move to Digital Labels

    Image: Glitter_Klo

    Russia’s State Duma Budget Committee supports a bill that regulates the procedure for collecting excise taxes and their administration following the transition to digital labeling of tobacco and nicotine-containing products, according to Interfax.

    “The development of the bill is due to the fact that from March 1, 2024, the requirements for labeling tobacco and nicotine-containing products will change. We are abandoning paper stamps and moving to using digital stamps for labeling,” Deputy Minister of Finance Alexey Sazanov said.

    “The term accounting and control special mark is being introduced. This is essentially the bar code that will be applied to the pack. Certain control requirements are being specified—the tax base cannot be less than the corresponding volume of production—tobacco or nicotine-containing products, fixed in state information system,” Sazanov said.

    Regarding the appearance of the digital mark, Sazanov said, “Instead of a physical excise stamp, there will be a barcode, like on medicines, on dairy products. There will be an identification sign.”

  • Montenegro Tobacco Excise Up in February

    Montenegro Tobacco Excise Up in February

    Image: Yeti Studio

    The government of Montenegro will increase the excise duty on cigarettes and smokeless tobacco products as of Feb. 1, 2024, to align its taxes with EU standards, reports SeeNews.

    The specific component will be raised to €50.50 ($55.25) per 1,000 cigarettes from €49, while the proportional component will remain unchanged.

    Excise duty on smokeless tobacco products will increase to €190 euro from €145.

    A similar increase is anticipated to take effect in July.  

  • Hong Kong Mulls Higher Tobacco Tax

    Hong Kong Mulls Higher Tobacco Tax

    Photo: Tobacco Reporter archive

    Authorities in Hong Kong are considering a further increase in tobacco duty, reports South China Morning Post, citing the city’s health minister.  

    Lo Chung-mau, secretary for health, did not confirm whether the measure would be included in Financial Secretary Paul Chan Mo-po’s budget next month. Tobacco taxes were previously increased in February 2023 by HKD0.60 ($0.07) per cigarette. A pack of 20 cigarettes now costs around HKD78.

    “Data from the World Health Organization and the global experience proves that an increase in tobacco tax is one of the most effective methods [to reduce smoking]. We will definitely consider it,” Lo said.

    Following last year’s tax increase, calls to the government’s smoking cessation hotline increased threefold to fourfold, showing that the move was effective to encourage people to quit smoking, according to Lo. The current smoking rate is 9.5 percent, and authorities hope to cut that down to 7.8 percent by next year.

    Currently, tobacco duty accounts for 64 percent of cigarette retail price in Hong Kong. The World Health Organization recommends 75 percent.

    The government is currently analyzing data from a public consultation on its tobacco control plans. Lo stated that the government aims to deliver short-term and long-term strategies.  

  • New Tobacco Tax Rates in Uzbekistan

    New Tobacco Tax Rates in Uzbekistan

    Photo: Golib Tolibov

    Uzbekistan has indexed excise tax rates for tobacco products for 2024.

    Local tobacco products were indexed by 12 percent, and imports were reduced by 5 percent.

    According to UZ Daily, the new excise rates on cigarettes, cigarillos, bidis and kreteks produced in the country are UZS250,700 ($20.31) per 1,000 pieces plus 10 percent. Import excises on these products are UZS325,000 per 1,000 pieces plus 10 percent. Cigar excises are UZS6,400 per piece. Other tobacco products, such as hookah, smoking tobacco, chewing tobacco, snuff, etc., also have new rates.

  • Ukraine Tobacco Taxes to Match EU’s by 2029

    Ukraine Tobacco Taxes to Match EU’s by 2029

    Image: andriano_cz

    Ukraine will reform its tobacco and fuel excise taxes, gradually introducing excises minimal for the European Union market over the next five years, reports Interfax.

    The country previously aimed to increase its tobacco excise tax rates to the EU’s minimal rates before 2025, but the anticipated windfall has since been eaten away by inflation due to the use of the hryvnia as its base rather than the euro. Under the new strategy, Ukraine’s tobacco excise tax rates will be tied to the euro.

    The government expects the measure to generate additional revenue equal to between 1.5 percent and 2.2 percent of GDP.

    Ukraine also plans to implement an electronic tracking system for tobacco products and e-liquids.

    The 2024-2029 National Revenue Strategy is one of the structural benchmarks of the cooperation program with the International Money Fund that Ukraine pledged to fulfill before the end of 2023.