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Tag: tax

  • 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%.

  • Finland Ups Taxes for Tobacco, Alcohol

    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.

  • Korea Busts Cigarette Smuggling Operation

    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.

  • 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.