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  • Pakistan Increases Tobacco Tax 240%

    Pakistan Increases Tobacco Tax 240%

    With cigarette manufacturers in Pakistan already pointing to an excessive Federal Excise Duty (FED) as a reason for a significant decrease in sales and a rising black market, the federal government announced it is imposing a 6% withholding tax on cigarette distributors in the 2025-26 budget, senior sources told ProPakistani. This will be an increase from the previous 2.5% rate.

    The provision for withholding tax rates under Section 153 of the Income Tax Ordinance will be changed to charge the new tax on the gross amount of payment received by distributors when they hand over cigarette sticks to retailers.

    It was previously reported that Pakistan’s government was facing pressure from the World Health Organization to increase its FED further.

  • Australia Stands with Highest Tobacco Taxes Despite Black Market Concerns 

    Australia Stands with Highest Tobacco Taxes Despite Black Market Concerns 

    A tobacco tax that’s helped drive Australian cigarette prices to world-leading highs won’t be lowered despite suggestions it has aided a rampant black market. Treasurer Jim Chalmers ruled out changing the tobacco excise Wednesday (June 4), dismissing New South Wales’ (NSW) Premier Chris Minns’ call that lower prices could help curb surging levels of illegal tobacco in the community.

    Federal excise taxes are A$1.40 (91 cents) per cigarette, driving the average cost of a pack of 20 to A$40 ($26). In the last six years, the excise taxes increased from A$16 to A$28 ($10.40 to $18.20) per pack, but the revenue collected by the government has still gone down as smokers turn to a flourishing black market, according to Minns. Tobacco tax revenue peaked at A$16.3 billion ($10.1 billion) in 2020 but has dipped to a projected A$7.4 billion ($4.8 billion) this year.

    Minns said police have better things to do than tobacco enforcement, and the “commonsense option” would be for the federal government to acknowledge the excise was not working. NSW Treasurer Daniel Mookhey insisted he would raise the issue with his federal counterpart despite the flat rejection.

    “We can’t ignore the fact there’s an interaction between the federal exercise and the emergence of illegal tobacco,” Mookhey said.

  • Illinois Increases Taxes on Tobacco, Sports Books

    Illinois Increases Taxes on Tobacco, Sports Books

    Needing to raise an additional $500 million in revenue to balance its budget, Illinois legislators voted to increase taxes on tobacco, vapes, and sports gambling, and expand taxes on out-of-state income for businesses. The budget saw a 3.9% spending increase to $55.3 billion, with the Democratic majority receiving heavy criticism for providing next to no time for public review of the massive spending plan and other major bills, pushing through a previously unseen 3,000 pages of bills in the final 48 hours, according to ABC News.

    The state intends to raise tax rates on any “product that is made from or derived from tobacco,” including cigarettes, chewing tobacco, vaping products and nicotine gum, according to legislators. The tax rate will be raised from 36% of the wholesale price of the products to 45%, according to the legislation, but will not be applied to smoking cessation products, according to the text of the bill.

  • Bangladesh’s Unchanged Tobacco Taxes Draw Criticism 

    Bangladesh’s Unchanged Tobacco Taxes Draw Criticism 

    Bangladesh’s interim government’s proposed national budget for Fiscal Year 2025-26 (July 2025-June 2026) has drawn criticism from anti-tobacco activists for keeping cigarette prices and taxes unchanged across all tiers. Finance Adviser Dr. Salehuddin Ahmed presented the proposed budget, but activists suggest the decision will deprive the government of at least Tk20,000 crore ($2.4 billion) in additional revenue while making cigarettes more accessible to young smokers.

    Activists urge the government to increase cigarette prices across all tiers, particularly by merging the low and medium tiers—which account for 80% of the market—into a single category with a minimum retail price (MRP) of Tk90 ($1.08) for 10 sticks.

    The budget also leaves bidi prices unchanged for the sixth consecutive time, with supplementary duty remaining static for the 10th straight year. Similarly, taxes on smokeless tobacco products such as jarda and gul remain unaltered, sparking concerns among health advocates.

    While the budget raises the advance tax on cigarette manufacturers from 3% to 5% and increases supplementary duty on imported cigarette paper from 150% to 300%, activists argue these measures fall short of ensuring meaningful public health protection.

  • Australia’s Latest Tobacco Regs Looming

    Australia’s Latest Tobacco Regs Looming

    Australian officials sent reminders to retailers that the nation’s harsh new tobacco regulations will be in full effect beginning July 1. The new regulations were announced in October 2024 and gave manufacturers five months to comply. Retailers were then given a three-month transition period to phase out old stock that will end in June.

    The new rules include banning certain flavors and ingredients that mask the taste of tobacco; using words like “smooth” or “gold” that make the product seem safer; having 20 sticks per pack and 10 packs per carton; making each cigarette the same size; and updating health warnings that will be printed on the packaging and products.

    According to the Daily Mail, cigarette prices in Australia are among the highest in the world due chiefly to heavy taxation. A standard 20-pack costs more than A$50 ($32.50), depending on the brand, with 70% of the retail price, A$35 ($22.75), going to the government as excise tax. Despite the tax increases, government revenue from tobacco dropped 39% as the tax hikes created a booming black market, with millions of Australians now buying illegal, counterfeit cigarettes sold in convenience stores. The Australian Tax Office estimates that nearly 20% of cigarettes smoked in the country come from criminal syndicates that evade taxes and sell at deep discounts.

  • Opinion: Washington Flavor Laws ‘Kicking the Can Down the Road’

    Opinion: Washington Flavor Laws ‘Kicking the Can Down the Road’

    This week, after previous renditions seemed dead in the water, Washington legislators slipped twin bills into the House and Senate that would impose a statewide flavor ban on tobacco products and add a carbon tax on cigarettes. In an opinion piece for the Tax Foundation, Adam Hoffer and Jacob Macumber-Rosin, both experts in tax policy, compared these schemes to others around the country.

    “A carbon tax on cigarettes is novel, while the idea for a flavor ban is not,” they wrote. “Massachusetts and California have already banned flavored tobacco products in their states, and the experiences have been so negative that the Biden administration backed off its own plan for a nationwide flavor ban.

    “Both Massachusetts and California experienced massive tax revenue declines, incredible growth in illicit market activity, and little to no change in smoking rates. Following its flavor ban in 2020, Massachusetts saw cigarette excise tax revenue decline by more than $100 million and revenue has persisted at the lower level. Unfortunately, fewer legal sales don’t necessarily translate to less consumption. Our previous work identified that about 90% of the reduction in sales in Massachusetts was offset by increases in legal sales in neighboring states. Illicit product seizures and smuggling estimates have skyrocketed.”

    The writers said California fared no better, losing more than $230 million in state cigarette sales and excise taxes since it banned flavors in December 2022. Unlike Massachusetts, however, smokers didn’t turn to neighboring states, they began utilizing illicit and international markets to replace their legal purchases.

    “One study collected details on 15,000 discarded cigarette packs from public trash containers across 10 major California cities in May and June of 2023,” they wrote. “These data showed that 21.1% of the discarded packs were menthol-style cigarettes, a mere 3% drop in menthol market share estimates from before the flavor ban.

    “The same data found foreign and illicit market share spiked. Non-US packs comprised 27.6% of the sample, compared to an estimated foreign market share of only 17% previously.”

    The state’s fiscal analysis predicts a flavor ban would decrease revenues by more than $100 million per year, and the proposed carbon tax would only recoup 1% of that.

    “The justification for applying a carbon tax on top of existing cigarette taxes is weak,” they wrote. “Secondhand smoke certainly harms others nearby who are forced to inhale it, and cigarette smoking releases carbon dioxide, but classifying cigarettes as a broad state-wide pollutant is a stretch.

    “These haphazard policies appear to be part of a ‘try-anything’ effort to close the state’s projected $15 billion budget shortfall. Washington State taxpayers deserve sound fiscal policy reforms that will provide stable, long-run revenue for the government. Narrow-based and patchwork fixes only kick the can down the road to the next set of elected officials.”

  • Cigar Industry Preparing for Trump’s Tariffs

    Cigar Industry Preparing for Trump’s Tariffs

    Yesterday (April 2), President Trump announced that the United States would be implementing widespread tariffs on nearly all products imported into the U.S., which would seemingly include cigars and smoking accessories.

    The Administration is implementing a 10% baseline tariff on nearly all imported goods from all countries except goods that are compliant with the USMCA free trade agreement between the U.S., Mexico, and Canada. Additionally, a group of approximately 60 countries is facing additional reciprocal tariffs that are half the rate they charge to the United States.

    “We are monitoring the situation and engaging with appropriate stakeholders to protect the robust premium cigar market in the United States,” said Joshua Habursky, executive director of the Premium Cigar Association. “The administration is well aware of the importance of small business retail in main streets across the country, and we are hoping to mitigate cost burdens on retailers, manufacturers, and consumers overall. America is first in the premium cigar retail space, and we plan to continue to hold that position.”

    The announced new reciprocal tariffs for countries that are relevant to the U.S. cigar industry include:

    • Dominican Republic and Honduras: 10% (matching the universal rate).
    • Nicaragua: 19% (reflecting its 36% tariff on U.S. goods).
    • Costa Rica: 10% (despite a 17% tariff on U.S. goods).
    • Mexico: USMCA-compliant cigars remain at 0%, but non-compliant goods face a 12% tariff if existing fentanyl/migration measures lapse.
    • China: 34 percent
    • European Union: 20 percent

    Writing for halfwheel, Patrick Lagreid said, “The largest percentage increase will not affect cigars, but the accessories used to light and cut them. Products imported from China, which produces a significant amount of cigar accessories, from lighters to cutters, ashtrays, humidors, and other products, will be subject to a 34% reciprocal tariff. This is in addition to a previously implemented 20% tariff, bringing the total to 54%. Last year, multiple executives at cigar accessory companies told halfwheel they were concerned about the potential tariff if Trump were to win the election.”

    The baseline 10 percent tariffs are scheduled to take effect April 5 at 12:01 am ET, and the reciprocal tariffs are slated to go into effect April 9 at 12:01 am ET.

    “We are fully committed to protecting the premium cigar industry, which plays an essential role in supporting American small businesses and consumer interests,” Rob Burgess, of Connector Inc., a PCA Government Affairs representative said. “The PCA’s government relations team is working diligently, engaging actively with government officials and key stakeholders to address the implications of these tariffs. Our aim is to reduce financial pressures while ensuring the United States continues to lead in the premium cigar market, benefiting retailers, manufacturers, and consumers alike.”

    In a statement sent out to its members, Cigar Rights of America said that it is “carefully reviewing the scope and details of today’s policy shift to understand its potential impact on the premium cigar industry, including supply chains, pricing, and retail operations. As the federal government moves forward with implementation, we will continue to monitor developments closely and engage with relevant agencies. We are committed to keeping stakeholders informed and will provide timely updates as additional information and guidance become available.”

    The tariffs come the week before the American cigar industry’s most important sales week: the annual PCA Convention & Trade Show. Most manufacturers will offer retailers aggressive discounts to try to get larger orders, but it’s unclear whether some companies will modify their promotions to account for these tariffs.

  • Washington: State Lawmakers Want to Increase Taxes and Ban Products

    Washington: State Lawmakers Want to Increase Taxes and Ban Products

    Democratic lawmakers in the state of Washington have revamped their approach to banning flavored tobacco products and combined it with an increase in cigarette taxes. The new legislation, House Bill 2068, revives the ambitious and controversial prohibition that made little progress in the state so far this year.

    The initial proposal banned flavored e-cigarettes and nicotine products beginning 90 days after the legislative session ends. The new ban, however, would begin July 1, 2027, allowing the state to continue collecting tax revenue for a budget that is predicted to have a $16 billion deficit over the next four years.

    Critics of such bans argue they lead to increased cigarette use as consumers look for alternatives, and that people who’ve turned to electronic cigarettes to quit smoking traditional cigarettes would no longer have flavored options. 

    Also in the new bill, according to Jake Goldstein-Street writing for the Washington Standard, the age to purchase nicotine pouches would be raised to 21 and “a $2-per-pack tax on cigarettes would be added that would rise with inflation. The first $5 million from the new tax would go toward preventing youth tobacco and vape use, while the rest would go into the state’s general fund.” Washington smokers already face one of the nation’s highest state cigarette taxes, totaling $3.77 between excise and sales taxes, he said. The tax new provisions would take effect Jan. 1, 2026.

  • Tennessee Bill Would Outlaw Most Vape Products

    Tennessee Bill Would Outlaw Most Vape Products

    A bill in Tennessee that would impose a state tax of up to 10% on vape products – a higher rate than tobacco – and effectively ban the sale of many vape products in the state by requiring application for FDA approval before products are sold is headed for a final Senate vote this week. Senate Bill 763 passed the Senate Finance Committee in a 9-2 vote, and a counterpart House panel with bipartisan support.

    Bill sponsor Ken Yager said the bill is aimed at stopping “the influx of Chinese vape products that are addicting our children and wreaking havoc on our schools” ― not an attack on Tennessee’s vape industry. However, critics say it is a “legislative weapon for big tobacco to crush competition.”

    “I don’t take my orders from big tobacco,” Yager told reporters.

    If signed into law, the bill would ban the sale of vapor products including hundreds of disposable and flavored products in Tennessee that are not approved or in the process of being approved by the U.S. Food and Drug Administration. Currently, just 34 vapor products have been approved by the FDA, and all are tied to big tobacco companies. Most vape products sold in the U.S. are imported from China. If passed, the bill would fine vape retailers $500 to $1,500 per product illegally sold.

    According to The Tennessean, Tennessee is one of about 20 states that does not currently levy a tax on vape products. If passed, the bill would impose a 10% tax on open system vape products and a 7% tax on closed system vape products. Tennessee taxes tobacco products at 6.6%. Yager told reporters his proposed tax on vape products “is really no different from the tax on other nicotine products.”

  • Bulgarian Cigarette Prices Set to Rise for Second Time in 2025 

    Bulgarian Cigarette Prices Set to Rise for Second Time in 2025 

    Starting on May 1, the price of cigarettes in Bulgaria will rise by 40 to 50 stotinki (22 to 28 cents) per pack. This increase follows the latest adjustments to excise duties on tobacco products, which were approved as part of the 2025 budget.

    The new excise duty rates mark the second price hike this year, following a similar increase earlier when excise rates were raised by nearly 6%. This earlier rise was part of a planned, gradual increase that had been set in place since late 2022, when a four-year schedule was introduced. However, the government accelerated the schedule, deciding that the 2026 rates would be applied a year earlier.

    The Bulgarian Tobacco Industry Association clarified that there was no truth to recent rumors about a price surge of 2.50 leva ($1.38) per pack starting in April as several groups warned that the new excise duty directive would lead to a significant price hike. The Bulgarian Tobacco Industry Association refuted these claims, stating that the proposed changes to the excise duty directive, which would have raised the minimum rate to 180 euros per 1,000 cigarettes, had not been implemented. They noted, however, that the European Commission is expected to increase the minimum tobacco product excise duties more substantially in the coming years.

    According to the Ministry of Finance, the current excise structure will see a phased increase. As of January 1, 2025, the minimum excise duty for every 1,000 cigarettes was raised to 202 leva ($111). This will rise to 210 leva ($115.50) per 1,000 cigarettes starting in May, with a further increase of 12 leva each year until 2029. Similar increases are expected for other tobacco products and those containing tobacco substitutes.