Bulgaria to Freeze Excise Duty on Cigarettes until 2017

Excise duty on cigarettes in Bulgaria will remain unchanged by 2017, according to Vanyo Tanov, Executive Director of the Customs Agency.

In a Tuesday interview for the Bulgarian National Television (BNT), Tanov reminded that cigarette excise duty was to reach EUR 90 per 1000 cigarettes by 2018 from the current EUR 78 under EU requirements.

Tanov explained that the excise duty hike on cigarettes was being postponed because it was difficult to implement in a country like Bulgaria with a low standard of living and low salaries.

He said that he had been given assurances by Finance Minister Simeon Djankov that the excise tax on cigarettes would remain unchanged by 2017.

The Customs Agency head emphasized that a sudden spike in cigarette prices would stimulate smuggling.

Tanov said that there were some 500 000-plus Bulgarians who were always on the lookout for contraband cigarettes and there would always be someone to cater to their needs as long as the demand was so high.

"Bulgaria is at a crossroads and the shortest roads to a number of other European countries cross its territory. What is more, unlike central European countries, Bulgaria also borders non-EU Member States, which encourages smuggling," Tanov declared.

He said than an increase in excise duty on cigarettes would result in increased pressure on Bulgaria from neighbor countries with lower prices of legally produced cigarettes with excise tax stamps.

To illustrate his point, Tanov said that a pack of cigarettes had a price tag of BGN 1.20 – 1.80 in Serbia, compared to BGN 5-7 in Bulgaria.