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Tag: tax

  • Georgia Tobacco Tax Reform Protects Domestic Production

    Georgia Tobacco Tax Reform Protects Domestic Production

    Georgia’s excise tax will increase by 85 tetri ($0.31) per pack for imported cigarettes, reaching 2.75 GEL ($1.02) per 20-cigarette pack beginning January 1, 2026. Outlined in a draft law proposed by Georgian Dream MPs, taxes on locally produced cigarettes will be reduced to 1.30 GEL ($0.48) per 20-cigarette pack for the first 35 million packs annually, and 2.75 GEL thereafter. Also, the ad valorem component for local production drops from 30% of retail price to 15% for the first 35 million packs, and 20% for production exceeding that amount.

    The legislation aims to protect and promote local tobacco production, increase competitiveness, and stabilize market share while maintaining fiscal and public policy objectives. Officials highlight that the new structure is expected to create a healthier competitive environment, support domestic producers, and sustain budget revenues.

  • Cyprus Kiosk Owners Ask for Tobacco Exemption

    Cyprus Kiosk Owners Ask for Tobacco Exemption

    Kiosk owners in Cyprus urged the finance ministry to seek an exemption from the EU’s planned tobacco tax hike, warning the measure would devastate small businesses and fuel smuggling across the island’s divide. Under the directive due in January 2028, cigarette prices would rise from €4.70 to €7 per pack, rolling tobacco from €7 to €13, and, for the first time, e-cigarettes, heated tobacco, and nicotine pouches would be taxed, effectively doubling their prices.

    The kiosk owners’ association, Sykade, told parliament’s commerce committee that half of kiosk revenues come from tobacco sales. It estimates 126 million cigarettes and 162 tons of tobacco are already smuggled annually from the north, costing the state at least €50 million in lost tax revenue. With 600 kiosks closed in the past decade, Sykade warned further hikes would mean closures, unemployment, and declining state income.

    Cyprus has one of Europe’s highest smoking rates at 34%, compared to the EU’s goal of reducing prevalence below 5% by 2040.

  • India to Use Cess, Not Tax, to Keep Tobacco Revenue Flowing

    India to Use Cess, Not Tax, to Keep Tobacco Revenue Flowing

    India’s central government is considering an additional cess (levy) on tobacco products such as cigarettes, gutkha, and chewing tobacco to sustain current tax revenues from these “sin goods” without altering the Goods and Services Tax (GST) framework, Moneycontrol reported. The move comes as the compensation cess regime under GST 2.0 is being phased out on products including tobacco and pan masala.

    The Centre reportedly intends to maintain the existing tax incidence through a separate central levy, ensuring states do not lose revenue once the cess mechanism expires. With consumption recovering and sin goods already in the 40% GST bracket, the Centre reportedly does not foresee a significant drop in state collections, opting instead for fiscal measures outside the GST framework to preserve inflows from tobacco and related products.

    Currently, tobacco products attract 28% GST plus a cess, bringing the effective tax burden to between 52% and 88%, among the highest for any consumer product. The GST Council, led by Finance Minister Nirmala Sitharaman, has kept this structure in place until at least the end of 2025, when the remaining liabilities under the pandemic-era compensation loan scheme are cleared. Industry observers say the proposed new levy would effectively extend the current tax burden beyond the cess period, maintaining both revenue stability for states and fiscal pressure on tobacco manufacturers.

  • Mexico Poised for Large Tobacco Tax Increase

    Mexico Poised for Large Tobacco Tax Increase

    Mexico’s proposed 2026 federal budget includes a steep hike in tobacco taxes that industry groups warn could expand illicit trade and harm small retailers. The plan would raise the ad valorem IEPS tax from 160% to 200% and gradually increase the per-cigarette quota from MX$0.61 ($0.033) to MX$1.15 ($0.062) by 2030.

    Officials say the measure aims to reduce smoking and fund healthcare, but trade associations argue it will instead push consumers toward cheaper illegal products. Legal cigarette packs could reach MX$100 ($5.40), while contraband versions sell for just MX$20–25 ($1.08–1.35), creating strong incentives for black-market purchases.

    According to the National Association of Small Traders (ANPEC), the price gap threatens 1.2 million small stores that support about 5 million people, as illicit sellers undercut legal retailers. The Confederation of Industrial Chambers (CONCAMIN) estimates tax evasion from illegal cigarettes costs the government MX$13–15 billion annually, with up to half of the tobacco market now illicit.

    Government data shows tobacco tax collections have fallen since 2019, dropping 6.9% year-on-year in 2024 and accounting for just 0.8% of total state income.

    The Senate is expected to debate and vote on the proposal starting October 20.

  • JTI Malaysia Backs Phased Tobacco Excise Hike, Stresses Illicit Concerns

    JTI Malaysia Backs Phased Tobacco Excise Hike, Stresses Illicit Concerns

    JTI Malaysia voiced support for the government’s phased tobacco excise increases for budget 2026, starting November 1, describing the approach as balanced for revenue stability and enforcement continuity. The company emphasized that illicit cigarettes remain a major concern, urging continued coordination between the Ministry of Finance, Royal Malaysian Customs, and industry players to ensure tax adjustments are matched by strong border enforcement.

    JTI also expressed disappointment that vape products were excluded from excise measures, despite full regulatory parity under the 2024 Control of Smoking Products for Public Health Act.

  • EU Tobacco Tax Would Worsen Cyprus’ €22M Illicit Losses

    EU Tobacco Tax Would Worsen Cyprus’ €22M Illicit Losses

    Cyprus joins 11 other EU member states in opposing the European Commission’s plan to dramatically increase tobacco taxes, as officials warned the move could worsen the country’s growing illicit cigarette trade, which already costs €22 million annually in lost revenue. At 29%, Cyprus has the seventh-highest smoking rate in the EU.

    The proposal, discussed at the Economic and Financial Affairs Council in Luxembourg, would nearly triple minimum excise duties on cigarettes and, for the first time, introduce EU-wide levies on e-cigarettes and heated tobacco products. Under the plan, minimum cigarette taxes would rise from €90 to €215 per 1,000 cigarettes, pushing the price of a pack in Cyprus from €4.50 to as much as €7.50, while hand-rolling tobacco would almost double in cost. Next-generation nicotine products would face a 45% minimum tax from 2028, increasing to €88 per 1,000 units by 2032.

    Cyprus already faces a mounting smuggling crisis, with illicit cigarette consumption rising to 14.3% in 2024, up from 11% the previous year—equal to 130 million illegal cigarettes consumed. Across the EU, illicit consumption reached 38.9 billion cigarettes, causing €14.9 billion in lost revenue.

  • Senegal Plans to Raise Tobacco Taxes

    Senegal Plans to Raise Tobacco Taxes

    Senegalese Prime Minister Ousmane Sonko announced plans to raise taxes on tobacco products, a move praised by the Campaign for Tobacco-Free Kids as a major victory for public health. The government says the increase will both reduce smoking rates and generate additional domestic revenue, helping cut the budget deficit and fund health investments. The administration reports that tobacco costs the economy more than 40 billion CFA francs (about $70 million) in healthcare and lost productivity annually.

    Sources around the endeavor suggest the tax rate would be between 70% and 100% of the retail cost.

  • Nigeria Urged to Double Tobacco Tax

    Nigeria Urged to Double Tobacco Tax

    Nigerian advocacy group CAPPA has urged the government to raise excise taxes on tobacco products to 100%, saying the move could save thousands of lives and recover ₦526 billion ($347 million) annually in health and productivity losses.

    CAPPA said the tobacco industry continues to target youths with cigarettes, vapes, and e-cigarettes despite nearly 30,000 tobacco-related deaths a year. The group called for swift action on a delayed 50% tax proposal and alignment with stronger tobacco controls seen in other African countries.

  • Vietnam to Hike Tobacco Taxes Under New Law

    Vietnam to Hike Tobacco Taxes Under New Law

    Vietnam’s National Assembly passed a new law significantly raising the Special Consumption Tax on tobacco, alcohol, and beer starting January 1, 2026. The law introduces a tax roadmap for tobacco products from 2027 to 2031, adding absolute tax amounts on top of existing percentage-based taxes for the first time.

    Under the new plan:

    • Cigarettes: Tax increases by VND 2,000 ($0.08) per pack annually, reaching VND 10,000 ($0.40) per pack by 2031.
    • Cigars: Starting at VND 20,000 ($0.80) per cigar in 2027, rising to VND 100,000 ($4) per cigar in 2031.
    • Other tobacco forms (e.g., pipe or shredded tobacco): Set at VND 20,000/100g or 100ml in 2027, increasing to VND 100,000 by 2031.

    This is the first time Vietnam will implement a structured absolute tobacco tax, following the lead of other countries around the globe. Prior to this, only ad valorem taxes applied.

  • EU Unveils Dual Tobacco Tax Proposals

    EU Unveils Dual Tobacco Tax Proposals

    Yesterday (July 16), the European Commission announced two major initiatives aimed at cutting tobacco use and boosting EU revenue: a long-anticipated revision of the Tobacco Taxation Directive and a new measure called the Tobacco Excise Duty Own Resource (TEDOR).

    The revised directive proposes higher minimum excise taxes and expands the scope to include e-cigarette liquids, nicotine pouches, and raw tobacco. Meanwhile, TEDOR would apply a uniform 15% levy on tobacco products released for consumption, expected to generate €11.2 billion annually.

    “While the proposal is meant to tackle the developments and emergence of new products (e-cigarettes, heated tobacco products, and new products containing nicotine), the European Commission also decided to revise the EU minimum rates applicable to traditional tobacco products,” the European Cigar Manufacturers Association (ECMA) said in a press release. “It disregards the different tax-bearing capacity of niche products from mass-produced tobacco and nicotine products, demonstrating a misunderstanding of the market.”

    “Increasing the EU minimum rate by 1,100% for niche products which are already the least affordable on the tobacco and nicotine market, is out of touch and completely irresponsible,” Paul Varakas, ECMA director general, said. “This proposal is very worrying. It goes against every commitment the EU Executive has made recently regarding reducing the regulatory burdens for SMEs and midcaps, companies that are largely dominating the cigar/cigarillo segment, as opposed to other products manufactured by Big Tobacco.” 

    While both measures aim to reduce tobacco use, particularly among youth, the TEDOR proposal is also part of the EU’s broader €2 trillion budget strategy.

    “[Commission President] Ursula von der Leyen and [European Commissioner for Budget] Piotr Serafin were both vocal about the need to increase Europe’s competitiveness by decreasing EU regulatory burdens,” said Adam Bartha, director of the European Policy Information Center. “The Tobacco Excise Duty Own Resource and the revision of the Tobacco Excise Directive goes against their own stated goals and increases the tax and regulatory burdens on Europeans without reducing smoking rates.”

    The Commission insists the reforms are vital to combat smoking and close loopholes fueling illicit trade, though opposition from countries like Italy and Greece could stall progress. However, both proposals face political hurdles, requiring unanimous approval from all member states.