New York Gov. Kathy Hochul’s executive budget proposes applying the state’s existing 75% wholesale tobacco tax to nicotine pouches. The proposal comes as state tobacco tax revenue declined from about $1 billion in 2021 to roughly $793 million last year, while cigarette smuggling — estimated to account for more than half of cigarettes consumed in New York — costs the state about $812 million annually, according to Tax Foundation data. State health data show nicotine pouch use among New York high school students increased from 1.5% in 2022 to 3% in 2025. The tax proposal is under consideration as part of budget negotiations.
Tag: tax
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Court Rules Korean Vape Juice Taxes Excessive
The Seoul Administrative Court has partially ruled in favor of vape juice importers in a lawsuit challenging the Ministry of Health and Welfare’s imposition of National Health Promotion Charges, according to The Korea Herald, finding that while vape juices should be legally classified as cigarettes, the charges applied were excessive and violated principles of proportionality and equality.
The court noted there was no evidence the importers intentionally misled authorities when declaring their products as derived from tobacco roots and stems, and highlighted that the levies—ranging from 278 million won to 1 billion won ($192,000 to $691,000)—exceeded sales revenue by up to 3.5 times, making payment effectively impossible. The ruling also criticized the flat-rate charge of 525 won ($0.36) per milliliter regardless of nicotine content, saying it failed to reflect differing health risks or serve the law’s public health objectives, while reaffirming that vape juices fall under the Tobacco Business Act’s definition of cigarette products.
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Indonesia Considers Special Tax for Illegal Cigarettes
Indonesia’s government proposed introducing a special excise tariff for illegal cigarettes as a way to curb illicit trade and boost state revenue, but the plan has sparked concern among industry players over potential market distortions and policy uncertainty. Finance Minister Purbaya Yudhi Sadewa said details are still being finalized, explaining the measure would mainly target small-scale local cigarette producers, while foreign illicit products would continue to face strict enforcement. He estimated that formalizing illegal production could generate trillions of rupiah in additional revenue, though discussions on fiscal impacts are ongoing and will require approval from the House of Representatives, a process that could take time, according to The Jakarta Post.
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Croatia Raises Tobacco Taxes
Croatia increased excise duties on cigarettes, tobacco products, and e-liquids from the start of the new year, pushing cigarette prices up by as much as €0.20 per pack, according to public broadcaster HRT. The government expects the tax hikes to generate nearly €130 million in additional revenue and says the measures are intended to curb smoking and nicotine use as part of its public health strategy.
Business groups cautioned against sharp increases, warning they could drive consumers toward the black market. Smoking remains widespread in Croatia, with about 900,000 smokers and high usage among youth, including e-cigarettes. Tobacco production also remains economically significant, with around 300 domestic producers accounting for roughly 6% of European output and generating about €400 million annually.
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Turkiye Limits Tax Hikes on Tobacco, Fuel, Alcohol
Türkiye will limit Special Consumption Tax (SCT) increases on tobacco products in the first half of 2026, applying a 7.95% hike instead of the usual adjustment tied to producer inflation, which was close to 10%. Under the presidential decree published in the Official Gazette, the per-pack excise tax on cigarettes will rise by ₺1.28 ($0.03) to ₺56.78 ($1.31). The move departs from Türkiye’s standard practice of revising tobacco taxes twice a year in line with the domestic producer price index and is intended to ease consumer price pressures.
Tobacco remains a major source of tax revenue in Türkiye, with more than 19 million smokers spending over $16 billion annually on cigarettes. From January to November 2025, tobacco generated ₺396.4 billion ($11.1 billion) in SCT revenue, accounting for a large share of the ₺1.01 trillion ($23.2 billion) collected from fuel, tobacco, and alcohol combined. The Treasury and Finance Ministry said the moderated tax increase supports the government’s 2026 inflation targets while remaining consistent with revenue projections in the central government budget.
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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%.
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Finland Ups Taxes for Tobacco, Alcohol
Finland will sharply raise tobacco and nicotine taxes from January 1, 2026, pushing retail prices higher as part of a broader fiscal reform. A pack of cigarettes will rise to about €11.50, with more than 90% of the price made up of tax, while nicotine pouch prices are set to jump by roughly 37%, from around €5 to €7 per container. Tobacco taxes will continue to increase at six-month intervals until mid-2027.
The government says the measures are intended to curb consumption and boost tax revenues, alongside parallel increases in alcohol taxes. Wine, beer, and cider prices will rise by an average of 9%, reinforcing a broader public-health and revenue strategy. By contrast, modest relief is planned in other areas, including slightly lower fuel excise duties and a small VAT cut on food and medicines.
The tobacco price hikes are among the most significant consumer impacts of Finland’s 2026 tax package, which also includes income tax cuts for higher earners and reductions in social assistance. Health fees will increase, adding further cost pressures, while officials emphasize that higher tobacco taxation remains a central tool in reducing smoking rates and funding public services.
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Korea Busts Cigarette Smuggling Operation
Seoul Regional Customs referred three people to prosecution for smuggling packs of cigarettes and falsifying customs declarations to evade taxes. Authorities said the suspects re-imported 1.75 million exported cigarette packs by claiming they were being sent to a third country, while concealing the goods in a warehouse in Busan and declaring shipments as water bottles and newspapers. The scheme reportedly avoided around 6.1 billion won ($4.2 million) in taxes.
According to The Korea Times, the ringleader, already on trial for a similar smuggling case, had amassed significant assets, including a high-value Seoul apartment, which authorities have seized in coordination with prosecutors.
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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.
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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.