Cigarette prices to be hiked from Thursday

Banking

Based on a new law on excise tax adopted by Hungarian lawmakers in June, the excise tax on tobacco products will increase from Thursday, and more price hikes are coming, according to Hungarian news agency MTI, reported by business news portal napi.hu yesterday.

The tax on cigarettes remains at 25% of the retail price, while cigars and cigarillos carry a 14% tax. The price of fine-cut and other consumer tobacco will rise from the current HUF 14,000 per kilogram to HUF 15,100.

The report notes that this is only the beginning, as the government is expected to impose two further price rises in order to bring the structure of tax on tobacco products in line with EU guidelines. In order to reach the EU-mandated minimum tax level, Hungary must raise tax on tobacco by 29% by the end of 2017, and this week’s raise is only the first of three steps to reach this target.

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