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Higher Tobacco Excise Means Higher Prices, More Contraband – JTI Romania

Cigarette maker Japan Tobacco International (JTI) said the Romanian tobacco excise calendar has already been rushed with the introduction of the vice tax, and an early increase of the excise would spell 50% increases in cigarette prices and would put contraband in control of 30% of the market.
Higher Tobacco Excise Means Higher Prices, More Contraband – JTI Romania
29 ian. 2009, 15:50, English

The excise for tobacco would be increased in the near future to the level it was supposed to reach by 2010 in accordance with the calendar agreed by Romania with the European Commission, government sources told MEDIAFAX.
 
According to the Fiscal Code, the total excise for one thousand cigarettes, valid on July 1, 2008, was EUR50. Its value was supposed to grow to EUR61.2 on July 1, 2009 and to EUR74 on July 1, 2010. The excise also includes the vice tax, which is EUR10.
 
According to Gilda Lazar, corporate affairs manager within JTI Romania, the excise increase calendar for 2010, negotiated with the EU, has already been rushed by one year, through the introduction of the vice tax.
 
Lazar added an early increase of the excises to the level set for 2010 would mean higher prices for cigarettes and expansion for the black market.
 
"In 2009, compared to 2008, we estimate price hikes reaching some 30% because of the excise, growth that we have already started implementing gradually. An increase of the excise, beyond the provisions of the current Fiscal Code, would bring prices 50% higher, some 20% less legal sales, in parallel with a 30% growth in contraband, namely state revenues would lose more than EUR700 million," Lazar said.