Slovakia Implements Tax on Tobacco and Nicotine Products

Sep.12.2024
Slovakia Implements Tax on Tobacco and Nicotine Products
Slovak National Council approves new tobacco tax law amendment to include e-cigarettes and nicotine products, with gradual increase in rates.

According to Slovak TV and Radio on September 11th, e-cigarette liquid, nicotine pouches, and other nicotine products will be included in the scope of tobacco product consumption tax starting next year. Additionally, the tax rate will gradually increase over the coming years. This is one of the main contents of the amendment to the Tobacco Product Consumption Tax Act passed by the Slovak National Council on Wednesday, the 11th.


The goal of this legal revision is not only to require labeling for products related to tobacco, but also to set a deadline for clearance of products without labeling. The law is also aimed at enhancing monitoring of the circulation of tobacco products and smokeless tobacco products, while expanding the definition of smokeless tobacco products to include chewing tobacco and snuff.


The Slovak Ministry of Finance stated that these measures are aimed at reducing the high public fiscal deficit and national debt by generating additional income for the national budget through relevant measures, thus stabilizing public finances. These changes will bring in 15 million euros in revenue for the national budget next year, increasing to 126 million euros in 2026 and further rising to 180 million euros in 2027.


The Ministry of Finance also mentioned that due to the short time these new tobacco products have been on the market, it is difficult to prove their reduced harm based on existing evidence. Especially among young people, the future potential public health expenditure they may cause cannot be estimated, and the public's awareness of the potential health risks of these products is insufficient, which is also a concern.


According to data from eKasa, consumption of new tobacco products has significantly increased from January 2022 to December 2023. E-cigarette sales have seen a 200% year-on-year increase, while sales of nicotine pouches have increased by 57%. The Ministry of Finance has proposed introducing a transaction record system, including monitoring of remote sales. Customs will be responsible for regulating products related to tobacco.


In the final vote, legislators rejected the amendment proposed by Marián Viskupič, which suggested a lower increase in tax rates compared to the government's plan. He had hoped that the rate increase would be in line with the growth in cigarette taxes, and the various provisions of the amendment would gradually take effect this year and in the coming years.


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