Ministry of Finance: Such an increase in cigarette prices is excessive

The increase in cigarette prices by two to five kuna per pack at the expense of consumers due to the increase in excise duties would be excessive and unjustified, announced the Ministry of Finance (MF) on its website.

The Ministry of Finance reacted today regarding estimates published in the media about the increase in retail cigarette prices by two to five kuna due to the increase in excise duties.

According to the Ministry’s calculations, the highest increase in excise duties is on cigarettes whose retail prices are up to 18 kuna, increasing by 1.62 lipa. Excise duties on cigarettes with retail prices of 19 kuna increase by 90 lipa, while those in the price categories from 20 to 35 kuna increase by 0.54 to 0.69 lipa.

The Ministry reminds that certain tobacco product manufacturers already raised the retail prices of their cigarettes during this May, that is, before the Government adopted the Regulation on the increase of excise duties.

For all these reasons, the Ministry considers the manufacturers’ announcement of further increases in retail prices due to the increase in excise duties above the mentioned amounts to be excessive and unjustified, emphasizing that any further increase would mean solely an increase in the income of tobacco product manufacturers at the expense of consumers.

In the case of the announced increase in retail cigarette prices by an amount greater than the increase in excise duties, the Government has the option to further increase excise duties for all tobacco product manufacturers, whereby the difference in the increase in excise duties would become revenue for the state budget, states the Ministry’s announcement.

The Regulation on the amount of excise duties on cigarettes, for fine-cut tobacco and other smoking tobacco has amended the calculation of excise duties in order to implement the obligations undertaken by the Republic of Croatia towards the European Union.

The Regulation establishes the amount of excise duty on cigarettes, specifically a specific excise duty of 197 kuna for one thousand cigarettes, a proportional excise duty of 37 percent of the retail price of cigarettes, and a minimum excise duty of 567 kuna for one thousand cigarettes.

At the same time, the excise duty on fine-cut tobacco is increased to 450 kuna per kilogram, and for other smoking tobacco to 380 kuna per kilogram.