According to reports from the Bulgarian National Broadcasting Station, an increase in the consumption tax on tobacco products will result in a gradual rise in prices from March 2022 until November 17th.
The price hike plan is set to be completed in January 2026. The decision was made after the Budget Committee of the Parliament approved it in the first reading.
According to unofficial estimates, the average price of a pack of cigarettes is expected to increase by approximately 20 lire (equivalent to approximately 0.76 yuan) . For other types of tobacco products, the price hike is expected to be even greater.
The bill text has been approved in the first reading, but representatives believe that changes need to be made before final passage. Dr. Gavraylova stated that under the current proposal, the consumption tax would increase by 15%, rather than 5%, resulting in a government revenue increase of 92 million leva (approximately 330 million yuan). Leftist representative Rumen Gechev raised concerns about the impact of a cigarette price increase on health, which could result in a reduction of 77 million packs of cigarettes.
Various companies within the industry are in favor of introducing a calendar to gradually increase the consumption tax. One proposal is as follows:
Virginia Zevelekova, a representative from one of the largest companies in the industry, commented that the new legislation poses a risk of increasing tobacco smuggling. She noted that the legislation doesn't take into account various product features, risk factors, and the different budgetary contributions of each tobacco product group.
According to Deputy Minister of Finance Liu Deimila Petkova, cigarettes have the smallest increase because they carry the greatest risk of smuggling compared to heated or other types of tobacco. She stated that specific excise taxes increase more because they are based on the principle of price, whereas proportional taxes are fixed rates. Ultimately, the government's revenue from taxes is not determined by business pricing decisions.
If the proposed calendar by the Ministry of Finance is approved, it would result in an increase of over 660 million rubles (approximately 2.47 billion yuan) throughout the entire period of consumption tax and value-added tax.
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