TobaccoReporter logo

Tag: tax

  • Cook Islands Looking to Raise Tobacco Taxes 30%

    Cook Islands Looking to Raise Tobacco Taxes 30%

    The Cook Islands Cabinet approved a 30% increase in tobacco taxes, aiming to “curb high smoking rates and reduce the burden of non-communicable diseases across the country.” Backed by the Ministry of Health and Te Marae Ora, the island’s main healthcare provider, the new policy will raise tobacco taxes by NZ$125.50 ($76.56) per 1,000 cigarettes or per kilogram of tobacco each year for the next three years. Beginning in 2028, an additional 5% annual increase will be added.

    If passed in Parliament, the tax hike would drive up the average price of a 20-pack of cigarettes from NZ$26.88 ($16.40) to NZ$35.54 ($21.68) by July 2027.

    According to the 2022 STEPS health survey, 35.5% of Cook Islands adults aged 25–64 smoke, including 44% of men between the ages of 18 and 44.

  • Illinois Raises Taxes on All Tobacco and Nicotine Products

    Illinois Raises Taxes on All Tobacco and Nicotine Products

    Several new Illinois tax increases take effect today (July 1), including for gasoline, sports bets, and tobacco and nicotine products. The state is attempting to raise $30 million in new revenue.

    The tax on tobacco and nicotine products other than cigarettes, including vapes, pouches, and cigars, will increase to 45% across the board, regardless of the previous tax rate. Tobacco retailers will also see their annual license fee double, going from $75 to $150 per year.

  • Croatia Raises Taxes on Tobacco Products

    Croatia Raises Taxes on Tobacco Products

    Effective today (July 1), in order to “bolster public finances while also supporting public health,” Croatia implemented new excise duty regulations on tobacco products in a move expected to boost state revenues by €74.7 million by year’s end. The Ministry of Finance said the impact on cigarette retail prices will be minimal, with “no more than a 20-cent increase per pack.”

    Under the updated rules, the specific excise duty on cigarettes will rise from €53.10 to €56.10 per 1,000 cigarettes, while the minimum excise duty will increase to €124.20. Fine-cut and other smoking tobacco will increase from €114.15 to €120.50/kg, heated tobacco will increase from €185.82 to €198.50/kg, cigars and cigarillos will be taxed at €120.50 per 1,000 pieces, e-liquids will be taxed at €0.20 per milliliter, and new tobacco products will be taxed at €120.50/kg.

  • Pakistan Shifting Toward Open Market Tobacco Pricing

    Pakistan Shifting Toward Open Market Tobacco Pricing

    Pakistan’s Economic Coordination Committee (ECC) directed the Ministry of National Food Security and Research to prepare a roadmap for moving away from the current practice of setting Minimum Indicative Prices (MIPs) for tobacco and transition toward open market pricing, sources told Business Recorder.

    While MIPs serve as a price floor to protect tobacco farmers—particularly when supply exceeds demand—they are not support prices and do not involve government subsidies.

    The ECC noted that shifting to market-driven pricing aligns with the broader government policy of phasing out price controls in favor of demand-and-supply dynamics. However, concerns were raised that cess (a local tax on tobacco), calculated as a percentage of MIPs, could be reduced if open market prices rise above government-set minimums.

    Despite approving revised MIPs for various tobacco types for the 2025–26 fiscal year, the ECC emphasized the need for further deliberation before dismantling the current system. The Ministry was instructed to develop a comprehensive transition plan and present it to the ECC in due course.

  • 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.”