Cigarette tax protects state monopoly

The excise tax on cigarettes adopted by the parliamentary budget committee will protect Bulgarian state monopoly Bulgartabac, chairperson Menda Stoyanova, who initiated the changes, said. The committee decided that the specific tax will be BGN 101 per 1,000 pieces, the ad valorem tax will be 23% of the sales price. That will considerably raise the price of cheaper cigarettes, while cigarettes in the higher price segment will not appreciate substantially.
The finance ministry suggested an excise of BGN 74 per 1,000 cigarettes plus 36% of the retail price. The revised tax distribution will help Bulgartabac keep its market share, which will allow the state to get a higher price when the holding is sold, Stoyanova admitted. The big multinationals that operate in Bulgaria also benefit from the decision. The cigarette factory in Plovdiv, which was privatised last year, will be the most affected by the change, as it currently keeps its products relatively cheap.

Finance

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