Tobacco industry demands from the government to gradually increase excise taxes on tobacco products

Tobacco industry demands from the government to gradually increase excise taxes on tobacco products

access_time2019-12-06 10:25:01

The tobacco industry demands from the government to gradually increase excise taxes on tobacco products and return the ad valorem tax to the level before a 3-fold increase.

“The increase in the ad valorem tax caused  another round of price hikes for tobacco products in 2019 and led to inflation, a sharp increase in cigarette smuggling.

As a result, the budget has not received taxes in the amount of GEL 175 million in 8 months while  rising prices significantly worsen the already difficult situation of the citizens.

 

Due to the constant rise in cigarette prices, many smokers switched to cheaper and unhealthy loose tobacco, which contains pesticides, genetically modified organisms  and lead in large quantities.



A study conducted by ACT Impact shows that illegal import of cigarettes from Azerbaijan grew by 10%, from Turkey by 34%, while smuggling increased by 211% .

The businessmen  appeal to the government and parliament to move to a phased increase in excise taxes in order to achieve the target excise level of 90 euros per 1000 cigarettes under the Association Agreement with the EU by 2029.

The private sector also raises the issue of the need to reduce the ad valorem tax from the current 30% to 10%. The decision to increase this tax from 10% to 30% was made in December 2018, after which the cigarettes increased significantly.

Businesses agree to a small increase in excise taxes in exchange for a reduction in ad valorem tax.



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