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.
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 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.