Bulgaria MPs Agree to Increase Cigarette Prices

Business | October 19, 2016, Wednesday // 11:29
Bulgaria: Bulgaria MPs Agree to Increase Cigarette Prices File photo, BGNES

The Bulgarian Parliament has passed legislation under which the excise tax on cigarettes will go up in 2017, also increasing consumer costs.

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 in force until now 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).

The new timetable for the increase 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.

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

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 actually the regime existing until last year, renounced 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: cigarettes, excise tax

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