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Tag: excise tax

  • Vietnam Eyes Illicit Market as it Introduces Mixed Tobacco Tax  

    Vietnam Eyes Illicit Market as it Introduces Mixed Tobacco Tax  

    Vietnam’s planned introduction of a mixed tobacco excise tax from 2027 is expected to combine a 75% ad valorem rate with a gradually increasing specific tax, adding 2,000 VND ($0.08) per pack annually and reaching 10,000 VND ($0.38) by 2031. The policy aims to reduce smoking rates, increase the tax share of retail prices to nearly 60%, and boost excise revenue, which is projected to more than double to 39.1 trillion VND ($1.5 billion) by 2030. However, officials and experts warn that higher taxes could widen price gaps and push some consumers toward illicit tobacco, which already accounts for an estimated 20–22% of the market and causes annual tax losses of up to 6 trillion VND ($228 million).

    Authorities say stronger enforcement will be critical to support the policy, including higher penalties for smuggling and retail violations, expanded oversight of e-commerce sales, and coordinated action among customs, police, and border forces. Recent enforcement efforts have resulted in over 23 million packs of illicit cigarettes seized and more than 1,600 violations recorded, though officials note that trafficking remains widespread and increasingly sophisticated across multiple regions.

  • Report: New 15% Tobacco Tax One of Five Streams EU Considering  

    Report: New 15% Tobacco Tax One of Five Streams EU Considering  

    Reuters reported that the European Union is discussing five new revenue streams that would help fund its seven-year budget, allowing for new priorities like defense ​and competitiveness and service joint debt, while limiting cuts to agriculture and regional aid.

    The proposed streams for 2028-2034 are an emissions trading system, a carbon border adjustment mechanism levy, a non-collected electronic ⁠waste tax, a corporate ​resource for ⁠Europe levy, and a tobacco excise duty. The tobacco tax would be a new 15% uniform call-rate tobacco duty, paid by EU member states from national budgets, which would bring in an estimated €11.2 billion ​a year, the ​Commission says.

    By a vote of 370-201, EU’s parliament voted to increase its budget 1.26%, increasing total spending to about €1.94 trillion.

  • Indonesia’s Tax Strategy Not Impacting Smoking Rates

    Indonesia’s Tax Strategy Not Impacting Smoking Rates

    Indonesia’s long-running reliance on tobacco excise increases has failed to significantly curb smoking, according to a National Health Survey, with around 70 million people still using tobacco and prevalence remaining among the highest globally. Despite a 23% tax increase in 2020 and steady annual rises since, cigarette affordability has remained largely unchanged, as income growth has offset price increases, leaving consumers spending roughly the same share of income on cigarettes over the past decade.

    Analysts say structural issues are undermining the effectiveness of tax policy, particularly wide price disparities across product categories. Lower-taxed hand-rolled kretek cigarettes continue to provide a cheaper alternative, encouraging smokers to downtrade rather than quit. This dynamic has limited the impact of higher taxes on overall consumption.

    Health economists argue that without more aggressive and harmonized tax reforms, excise policy alone will continue to fall short as a deterrent. The findings underscore broader challenges for tobacco control strategies in emerging markets, where affordability and product substitution can blunt the intended impact of fiscal measures.

  • Poland Moves to Tax Induction E-Cigarettes

    Poland Moves to Tax Induction E-Cigarettes

    Poland’s government is set to introduce excise duties on induction-based e-cigarettes, aiming to close regulatory gaps that have allowed some products to be taxed at lower rates, according to a report from WNP. Under proposed amendments to the Excise Tax Act, devices and liquid tanks using electromagnetic induction — identified by the presence of a ferromagnetic element — will be classified as e-cigarettes and subject to a PLN 40 ($11.20) per unit tax. The move is part of broader efforts to tighten oversight of emerging vape technologies and ensure consistent taxation across the category.

  • Tasmanian Retailers Demand Tobacco Tax Overhaul

    Tasmanian Retailers Demand Tobacco Tax Overhaul

    Tasmania’s independent retailers are calling on the Australian government to overhaul its tobacco excise strategy, warning that the black market has spiraled “beyond control.” Tasmania Independent Retailers (TIR), representing 80 IGA and IGA-branded stores, said illicit cigarettes are being sold for as little as A$10 per pack ($7), compared with A$40–50 ($28–35) for legal products, fueling organized crime and undercutting legitimate retailers.

    TIR chair Michael Baxter criticized the government for persisting with high excise rates and heavy enforcement spending while failing to curb illegal sales, citing unregulated menthol products and weak age checks as risks to youth. Federal excise revenue has dropped from over A$16 billion ($11.2 billion) in 2019 to about A$7.4 billion ($5.2 billion) currently, and 2025 research by FTI Consulting estimates that illicit tobacco now accounts for roughly half of all cigarettes consumed in Australia. Baxter called for recalibrated excise settings and more targeted enforcement, labeling current policy “a disaster” that has left the government effectively losing control of the market.

  • Ugandan CSOs Want Higher Taxes to Push Already Declining Smoking Rate

    Ugandan CSOs Want Higher Taxes to Push Already Declining Smoking Rate

    Several civil society organizations (CSO) in Uganda have asked the Ministry of Finance to increase the tax on imported tobacco products to 75%, according to New Vision. Mengo Talibita, a representative of the Tobacco Control Committee, said current excise taxes are often in the 31% to 35% range, “leaving cigarettes relatively affordable.”  

    Uganda’s Tobacco Control Act of 2015 introduced 100% smoke-free public spaces, banned shisha and e-cigarettes, prohibited tobacco advertising, required 65% graphic warnings on packaging, raised the smoking age to 21, and added restrictions to where tobacco products could be sold. Since then, the country’s modest smoking rate decreased from 7.9% to 6.7%.

    Talibita said the tobacco industry tries to manipulate government policy during the tax cycle, and Minister of State for Finance, Planning and Economic Development, Henry Musasizi said the department is under heavy pressure from the CSOs to increase the tax rates. In an interview with New Vision, one smoker who declined to be named said, “Much as the law was put in place, there were no gazette places for smokers. Apparently, when one wants to smoke, it is hell one gets [with] insults from the public.

    “We need to be given freedom as smokers. Let the government put in place what was agreed for us.”

  • Latvia Continues Plan of Raising Tobacco Taxes

    Latvia Continues Plan of Raising Tobacco Taxes

    Latvia has seen a dramatic rise in cigarette prices over the past decade, with the excise tax on popular brands like Winston doubling since 2017. According to an analysis by Latvian Television’s investigative program “Aizliegtais paņēmiens”, excise revenue from tobacco grew 53% between 2017 and 2025, reaching €291 million last year. The price of a pack of Winston cigarettes increased from €3 in 2017 to around €5.40 in 2025, with taxes now making up roughly 81% of the retail price. Planned further excise increases of 15% in both 2027 and 2028 could push prices near €8 per pack.

    While higher excise duties have boosted government revenue, they have also raised concerns about the growth of the illegal tobacco market, as retail sales volumes fell approximately 22% over the same period. Tobacco is not domestically produced in Latvia, presenting fewer variables for authorities to weigh when considering excise policy.

  • NSW Tops 100 Store Closures as New Tobacco Taxes Begin  

    NSW Tops 100 Store Closures as New Tobacco Taxes Begin  

    Authorities in Australia’s New South Wales have closed 105 tobacconist shops operating illegally since strengthened tobacco and vaping laws took effect in November 2025. In the past 10 days alone, 30 stores across multiple Local Health Districts were ordered to close for 90 days, with inspectors seizing about 700,000 illicit cigarettes and 3,900 illegal vapes. This comes as a federal tobacco excise increase takes effect today (March 3), raising concerns about a widening price gap between legal and illicit products.

    Under the new laws, NSW Health, supported by NSW Police, can impose 90-day closures on premises selling illicit tobacco, illegal vaping goods, or operating without a license, while courts may issue long-term closures of up to one year. The legislation also introduces penalties of more than A$1.5 million ($1.1 million) and up to seven years’ imprisonment for possession or sale of commercial quantities of illicit tobacco, along with new offences and lease termination powers for landlords. Health Minister Ryan Park said enforcement would intensify with 30 additional inspectors added statewide, bringing the dedicated tobacco compliance team to 78 staff.

  • Bosnia and Herzegovina Raises Cigarette Duty

    Bosnia and Herzegovina Raises Cigarette Duty

    Cigarette prices in Bosnia and Herzegovina increased on January 1 after a higher minimum excise duty came into force under a decision by the Board of Directors of the Indirect Taxation Administration (ITA). The minimum excise duty for 2026 was raised by 0.19 BAM ($0.11) per pack, setting the rate at 188.50 BAM ($113.10) per 1,000 cigarettes, or 3.77 BAM ($2.26) per pack of 20, up from 179 BAM ($107.40), or 3.58 BAM ($2.15), last year.

    The specific excise duty on cigarettes remains unchanged at 1.65 BAM ($0.99) per pack of 20. Meanwhile, excise duty on smoking tobacco has been set at 80% of the minimum cigarette excise, increasing to 150.80 BAM ($90.48) per kilogram in 2026 from 143.20 BAM ($85.92) in 2025.

    The ITA Management Board also confirmed that the compensatory interest rate for the period from January 1 to June 30, 2026, will remain unchanged at 12%.

  • India Raises Cigarette Tax to Curb Consumption

    India Raises Cigarette Tax to Curb Consumption

    India’s parliament approved the Central Excise (Amendment) Bill 2025, a tax reform expected to raise cigarette prices for the country’s estimated 100 million smokers. The bill was introduced on December 1 and passed on December 3.

    The new law replaces a temporary levy and imposes a value-based tax of 2,700–11,000 rupees ($29–$122) per thousand sticks, depending on size, in addition to a 40% goods and services tax. Experts estimate this could raise excise duties by 25–40% on average, potentially prompting higher retail prices. Finance Minister Nirmala Sitharaman emphasized that cigarettes should not become affordable, noting that current taxes account for about 53% of retail prices.