Bulgaria: Cigarette Prices to Increase by 30%


Due to new minimum excise duty rates introduced by the EU, Bulgaria plans to rise prices on top selling cigarette brands by BGN 1 – 1.20 per pack.  The Bulgarian daily 24 Hours writes that by the end of 2017 the excise tax rate is to achieve EUR 90 per thousand cigarettes.

Today in Bulgaria top selling cigarette brands are sold at a price of BGN 4.50, which is expected to increase by almost 30% in the next 4 years to no less than BGN 5.50 – 5.70.

Cigarette prices in Bulgaria were not changed since 2010, when the latest increase in the excise tax rate took place. In past 3 years they were not affected by the 11.5% inflation rate.

To compare, other EU Member States increased cigarette prices by 2 – 14% in 2013 and the average increase is 4%.  At present,  Bulgaria has the lowest cigarette prices in the EU.   A survey revealed that Bulgaria has one of the highest taxing rates.

Bulgarian daily 24 Hours writes that cigarettes with average prices worth BGN 4.50, less than BGN 1 goes to production costs, but the rest is used to pay taxes and purchase excise tax stamps.  Besides this,  Bulgaria has one of the highest tprices for excise tax stamps, EUR 6.1 per 1000 cigarettes.

In many other EU Member States, excise tax stamps are free of charge because their cost is covered by the state.  That is why tobacco companies sell their tobacco products in the low price segment in Bulgaria, registering zero profit or even losses.

Experts say that all local Bulgarian cigarette companies face a difficulty, while international tobacco companies are reporting negative financial results.   An increase by BGN 0.10 – 0.20 per cigarettes pack may be expected in 2013 in Bulgaria, provided that the excise tax rate does not rise.

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