Cigarette packs become more expensive again, due to tobacco excise tax increase

Cigarettes will cost more for smokers this year. Based on the excise tax calendar approved by the Ministry of Finance, the increase in the price of packages in retail stores for some brands has begun to be reflected at the beginning of this year, and others are expected to increase them in the future. So far, the increase is an average of 10 lek per package.

The announcement of the establishment of maximum sales prices has also been made to the General Directorate of Taxes by several companies, due to the obligation arising from the Value Added Tax law. Currently, the most expensive package on the market is sold at a maximum price of 500 lek.

According to data from the Ministry of Finance, cigarette imports have decreased in 11 months compared to the same period last year, recording a quantity of 2844 tons imported during January-November, from 2924 tons recorded in the same period a year ago, but there is a slight increase during the months of November compared to November 2023, a month in which 274 tons of cigarettes were imported.

The government plans to further increase the excise tax on tobacco products. Referring to the medium-term revenue strategy 2024-2027, in our country, for some excisable goods such as tobacco, the combined taxation scheme that includes a specific excise tax per product unit, but also a percentage excise tax on the selling price of the product, is not applied. This combined scheme is applied in several countries. For this reason, the strategy foresees that in the coming years, after the end of the excise tax increase calendar 2022-2026, a new calendar will be designed that will take into account the taxation scheme that combines the fixed quota system with the ad valorem system.

The EU directive stipulates that the excise duty level should be no lower than 90 Euros/1000 threads.

Budget revenues from tobacco excise are listed as the second largest item in total customs revenues, after fuel.