Economy
Hungary parliamentary committee seeks to squash excise tax hike on tobacco
Parliament’s constitutional committee has submitted in the last instant amendment proposals to a package of bills on the economy that would amend a total of seven regulations. Under the original notion, the government would have hiked in three steps - this summer, next January and July 2012 - the excise tax on cigarettes and other tobacco products.
The move would have taken the excise tax on cigarette and fine-cut tobacco up by 7.4% and 28%, respectively.
As of 1 January 2011 the excise tax on cigarettes was raised from HUF 9,350 to HUF 9,750 and the excise tax rate determined as a percentage of the retail price from 28.3% to 28.4% furthermore, the minimum excise tax changed from HUF 17,330 per thousand cigarettes to HUF 18,080.
The excise tax payable on fine-cut smoking tobacco and other smoking tobacco was also upped to HUF 7,860 from HUF 7,280.
Under the original proposal, the minimum excise tax / 1,000 cigarettes is to be raised to HUF 19,400 from HUF 18,080 and that on fine-cut tobacco would go up to HUF 10,060 from HUF 7,860 until next July.
The excise tax rate expressed as a percentage of the retail price would remain unchanged for these products.
Under the amendment proposal, none of the excise tax hikes would remain in the bill, because raising the excise tax on tobacco products “is against strategic goals".
According to the reasoning, a “long-term strategy is needed in the restructuring of taxes on tobacco products." The aim is to create similar taxes on similarly harmful products. To this end the proportional part of the mixed excise tax on cigarettes and other smoking tobacco should be reduced and their quantity-based component should be increased; and their tax burden should also be evened out more, they explained.
Is it unhealthy? Then we’ll tax it! Or not?
It is interesting to hear that raising the excise tax on tobacco goes against the cabinet’s strategic targets, now that a public health product fee, dubbed “chips tax" will be slapped on foodstuff authorities deem unhealthy from 1 September 2011.Among others the new levy will be imposed on cocoa powder, soft drinks with fruit content below 25% and instant soups and sauces. But the taxing of tobacco products is suddenly not so important now.
The original bill referred to an EU directive that stipulates the minimum tax content of tobacco products to be reached by 2018. It said “such a restructuring took place on the market of tobacco products and even in 2011 such market processes and underway that put the planned budget revenues at risk." Those submitting the bill probably referred to the intensifying market competition that leads to declining prices.
The move would have taken the excise tax on cigarette and fine-cut tobacco up by 7.4% and 28%, respectively.
As of 1 January 2011 the excise tax on cigarettes was raised from HUF 9,350 to HUF 9,750 and the excise tax rate determined as a percentage of the retail price from 28.3% to 28.4% furthermore, the minimum excise tax changed from HUF 17,330 per thousand cigarettes to HUF 18,080.
The excise tax payable on fine-cut smoking tobacco and other smoking tobacco was also upped to HUF 7,860 from HUF 7,280.
Under the original proposal, the minimum excise tax / 1,000 cigarettes is to be raised to HUF 19,400 from HUF 18,080 and that on fine-cut tobacco would go up to HUF 10,060 from HUF 7,860 until next July.
The excise tax rate expressed as a percentage of the retail price would remain unchanged for these products.
Under the amendment proposal, none of the excise tax hikes would remain in the bill, because raising the excise tax on tobacco products “is against strategic goals".
According to the reasoning, a “long-term strategy is needed in the restructuring of taxes on tobacco products." The aim is to create similar taxes on similarly harmful products. To this end the proportional part of the mixed excise tax on cigarettes and other smoking tobacco should be reduced and their quantity-based component should be increased; and their tax burden should also be evened out more, they explained.
Is it unhealthy? Then we’ll tax it! Or not?
It is interesting to hear that raising the excise tax on tobacco goes against the cabinet’s strategic targets, now that a public health product fee, dubbed “chips tax" will be slapped on foodstuff authorities deem unhealthy from 1 September 2011.Among others the new levy will be imposed on cocoa powder, soft drinks with fruit content below 25% and instant soups and sauces. But the taxing of tobacco products is suddenly not so important now.
The original bill referred to an EU directive that stipulates the minimum tax content of tobacco products to be reached by 2018. It said “such a restructuring took place on the market of tobacco products and even in 2011 such market processes and underway that put the planned budget revenues at risk." Those submitting the bill probably referred to the intensifying market competition that leads to declining prices.
