Croatia plans major tobacco tax hike

The Ministry of Finance of Croatia has put forward for public consultation a draft Regulation on the excise duty rates on tobacco products, which mostly plans to raise them by more than five percent starting July 1 this year, thereby generating additional revenue of nearly 75 million euros in the budget by the end of the year.

The proposed Regulation increases the excise duty on cigarettes and the minimum excise duty on cigarettes, specifically setting the specific excise duty at 56.10 euros per 1,000 cigarettes, the proportional excise duty at 34 percent of the retail price of cigarettes, and the minimum excise duty on cigarettes at 124.20 euros per 1,000 cigarettes, CE Report quotes HINA.

The excise duty would also increase for finely cut tobacco for rolling cigarettes and other smoking tobacco to 120.50 euros per kilogram, as well as for cigars and cigarillos to 120.50 euros per 1,000 pieces.

It is also planned to increase the excise duty on e-liquid to 0.20 euros per 1 milliliter, on heated tobacco products to 198.50 euros per kilogram, and on new tobacco products to 120.50 euros per kilogram.

For comparison, under the currently valid Regulation, the specific excise duty on cigarettes is 53.10 euros per 1,000 cigarettes, the proportional excise duty is 34 percent of the retail price, and the minimum excise duty on cigarettes is 117.87 euros per 1,000 cigarettes. The excise duty on finely cut tobacco for rolling cigarettes and other smoking tobacco is 114.15 euros per kilogram, and on cigars and cigarillos is 114.15 euros per 1,000 pieces.

Excise duty on e-liquid is currently not charged, while the excise duty on heated tobacco products is 185.82 euros per kilogram and on new tobacco products 114.15 euros per kilogram.

“With this adjustment of the specific excise duty amount, maintaining the proportional excise duty rate at 34 percent of the retail price, and increasing the minimum excise duty on cigarettes as well as excise duties on other tobacco products (finely cut tobacco for rolling cigarettes, other smoking tobacco, cigars and cigarillos) and tobacco products (e-liquid, heated tobacco products, and new tobacco products), the fiscal effect of increased excise revenue in the state budget from tobacco products excise duty is estimated at 74.7 million euros for 2025. The projection is based on the proposed entry into force of this regulation on July 1, 2025,” the Ministry of Finance states.

They add that this will also achieve health effects by reducing consumption of these products. The draft regulation is open for public consultation until June 20.