Prices of Cigarettes to Go Up in Bulgaria through 2017

Business » FINANCE | September 19, 2016, Monday // 16:01| Views: | Comments: 0
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Bulgaria: Prices of Cigarettes to Go Up in Bulgaria through 2017 File photo

Bulgaria will return to a higher time table for the excise tax on cigarettes in a gradual manner by the beginning of 2018, Finance Minister Vladislav Goranov has said.

Earlier, some media outlets reported that changes to the excise were being prepared to meet EU requirements.

However, one of the reasons for the step is the "aggressive behavior" shown by some of the traders in tobacco products threatening the entire market, daily 24 Chasa quotes Goranov as telling journalists.

This will result in a "sustainable" increase in prices of cigarettes by January 01, 2018.

The date mentioned is when Bulgaria will be obliged to introduce the minimum EU excise tax on cigarettes, which is EUR 90 per 1000 pieces (a goal that is also fulfilled if the current timetable is kept in force).

This means prices will go up again as of January 01, 2018, Goranov has warned.

More expensive cigarette brands will be affected by BGN 0.15 (EUR 0.07), while for a pack of more affordable ones the increase will be around BGN 0.10.

The overall increase in the sale price would be around BGN 0.20-30 by the end of 2017.

The current tax is BGN 70 per 100 pieces (the "specific excise"), plus 38% of the sale price (the so-called "ad valorem excise duty"), but its minimum total value is BGN 161 per 1000 pcs (EUR 82.2).

The legislation currently in force foresees a rise through 2017 measured at BGN 70 plus 40% of the sale price, with a minimum total price of BGN 167 per 100 pcs. In 2018, the respective increase would have set the excise tax at BGN 70 per 1000 pcs with 42% of the sale price and a minimum total value of BGN 177 (EUR 90.3).

A new timetable for the increase, if adopted, would see a more abrupt increase in the specific tax (BGN 101 per 1000 pcs as of January 2017) and a lower ad valorem excise duty (27% as of the same time), with a minimum threshold of BGN 168.

From 2018, the proposed increase would set the tax at BGN 101 per 1000 pcs + 28% of the sale price, with a minimum threshold of BGN 177.

The "new timetable" was renounced last year in favour of the current one, with critics of the move then arguing it would give an edge to two local cigarette producers. They also insisted EU practices suggested the specific tax - and not the ad valorem duty - should be increased when modifying the excise to base state revenues on the amount of cigarettes sold and not on their market price.

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Tags: Vladislav Goranov, cigarettes, excise tax
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