tobacco taxationNovember 22, 2010 – from the National Assembly of the Republic of Bulgaria – changes in the tobacco taxes.

Cigarettes longer than eight centimeters, without the filter, will be subject to double excise duty. This is stipulated with the amendments passed on second reading to the Excise Duty and Tax Warehouse Act. The excise duty for each cigarette longer than eight centimeters, without the filter and mouthpiece, but less than 11 cm will equal the one for two cigarettes. Currently this has applied to cigarettes longer than 9 cm up to 18 cm.

The amendments increase also the price of plain tobacco, which will be taxed the same as fine cut tobacco. This will be done by expanding the definition of fine-cut tobacco – for such will now be considered tobacco, in which the tobacco particles have a cut width of less than 1.5 mm, currently being – less than 1 millimeter.

In brief, the adopted change to the tobacco excise duty ups the price of tobacco from the present BGN 100 (69.57 USD) to BGN 130 (90.45 USD) per kilogram. The law prescribes the price to rise to BGN 152 (105.69 USD) per kilogram as of January 1, 2012.

The government’s motive for the increase is that it would equalize the tax burden for this product with the excise duty for manufactured tobacco cigarettes. Following its last year’s increase, cut tobacco turned out to be much cheaper than manufactured cigarettes and its consumption increased over 200 times, according to data from the Finance Ministry.