The European Commission has presented a legislative proposal to significantly increase minimum excise duties on tobacco products.
Brussels is preparing a sharp increase in the price of cigarettes and fuel. The European Commission has presented a legislative proposal to sharply increase the minimum excise duty on tobacco products, which will increase the price of a pack of cigarettes in Bulgaria by around 3.70 leva, writes Trud.
At the same time, it has already been decided that gasoline and diesel will be included in the emissions trading system from the beginning of 2027, which, according to calculations by the Bulgarian Oil and Gas Association, will lead to an increase in the price of automotive fuels of 30 to 50 cents per liter. The European Commission justifies these changes on grounds of human health and environmental protection.
The European Commission’s (EC) new legislative proposal aims to set the minimum excise duty on cigarettes at €215 per 1,000 cigarettes and at 63% of the average retail price in the country concerned. However, this minimum excise duty will be adjusted for each EU Member State according to the price level in that country compared to the average level in EU countries. Thus, minimum excise duty levels will vary from country to country, which is advantageous for Bulgaria, since we have the lowest income in the EU and our overall price level remains well below the European average.
According to the latest official data from Eurostat, prices in Bulgaria are 60% of the EU average. Applying the formula proposed by the EC in the directive for determining excise duties on tobacco products, the minimum excise duty in Bulgaria should be 186.33 euros per 1,000 pieces, or 364.43 leva per 1,000 pieces.
Currently, the excise tax on cigarettes in Bulgaria is 131 leva per 1,000 cigarettes, plus 22% of the retail price, but cannot be lower than 210 leva per 1,000 cigarettes. This means that the minimum excise tax increase will be 154.43 leva per 1,000 cigarettes, or more than 3 leva per pack. However, since a 20% VAT is also applied to the excise tax, the final increase in the price of a pack of cigarettes, due to the tax increase alone, will reach 3.70 leva. Considering that a pack of cigarettes currently generally costs between 6 and 6.80 leva, it will reach approximately 10 leva with this increase. For comparison, in Italy, a pack of cigarettes of a well-known brand already costs 6.50 euros.
For countries where prices are higher than the EU average, the minimum excise duty on cigarettes will be higher than €215 per 1,000 cigarettes. The EC gives the specific example of a country where prices are 10% higher than the average. In this country, the minimum excise duty on cigarettes will be €222 per 1,000 cigarettes. In addition, the excise duty must represent at least 63% of the average selling price of cigarettes in that country.
The European Commission is proposing that changes to the level of excise duties on cigarettes should come into force from 2028. Final adoption of the directive requires unanimity among EU countries.
