A pack of cigarettes in Bulgaria could become nearly €2 more expensive if the European Union adopts the proposal for new minimum excise duty levels. At the current average price of around €3.50-3.80, this would most often mean a price of between €5.50 and €5.80 per pack.
The European Commission’s proposal stipulates that the minimum excise duty on cigarettes should be 60% of the average retail selling price, but no less than €200 per 1,000 cigarettes. The reform is part of a broader overhaul of the rules governing the taxation of tobacco products in the EU.
No decision yet
The finance ministers of the EU member states discussed the changes at the meeting of the Economic and Financial Affairs Council on 9 November. No final agreement was reached, as the change requires unanimity. The Council presidency said significant progress had been made, but one member state remained opposed to the compromise text.
According to a publication by “Trud”, that country is Malta. During the negotiations, Bulgaria and nine other countries agreed on longer deadlines for reaching the new minimum levels in order to avoid a sharp increase in cigarette prices.
Gradual increase in excise duty
For most EU countries, the proposal provides for a minimum excise duty of €140 per 1,000 cigarettes between 1 July 2028 and 31 December 2029. The rate should then rise to €170 for the period from 1 January 2030 to 31 December 2031. From 1 January 2032, the threshold should be €200 per 1,000 cigarettes.
Bulgaria will have more time. The country must reach a level of €140 per 1,000 cigarettes from 1 July 2028 to 31 December 2031. The next threshold of €170 will apply between the beginning of 2032 and the end of 2035, while the minimum excise duty of €200 per 1,000 cigarettes must be reached from 1 January 2036.
At present, the excise duty on cigarettes in Bulgaria is €77 per 1,000 cigarettes plus 21% of the selling price, but no less than €120 per 1,000 cigarettes. For one pack, this means a minimum excise duty of €2.40. The rate has already been scheduled to increase to at least €126 per 1,000 cigarettes from 1 March 2027 and to €132 from 1 January 2028.
How it will affect the price
To reach the threshold of €200 per 1,000 cigarettes, the excise duty must increase by €1.60 per pack. VAT is also charged on this amount, resulting in an approximately €1.92 higher final price. This would bring cigarette prices in Bulgaria close to the price of a kilogram of pork chops.
As part of the negotiations, it was agreed that farmers who grow and dry tobacco before handing it over to processors would be exempt from the obligation to provide information in the excise goods tracking system. The final change to the minimum rates will enter into force only after a unanimous decision by the member states.
Sources: trud.bg