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Anti-smoking bill to cut budget revenue by at least HUF 32.5 bln in 2011

Anti-smoking legislation, if passed in its current form by parliament, could reduce excise-tax revenues by between HUF 32.5 billion and HUF 58.5 billion in 2011, business daily Napi Gazdaság said.

The paper quotes a financial analysis of the National Tax and Customs Office (NVA) and says that NVA will initiate an amendment of the budget as soon as possible if the bill is adopted by parliament within two weeks.

The analysis said tobacco consumption could fall 7-14% in the third quarter and 11-19% in the fourth quarter, which could result in a HUF 13 billion-15 billion loss in excise tax revenue. If a smoking ban is introduced at pubs and restaurants, that could lead to a 15-24% decline in alcohol consumption, which in turn would result in a further HUF 2.5 billion-3 billion loss in excise tax revenue. A further HUF 4.5 billion-8.5 billion in VAT revenue would be lost from the VAT on cigarettes, and additional VAT revenue would be lost due to lower VAT payments by catering companies.