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Higher excise duty on cigarettes mulled by Finance Ministry, media report says

Mon, Sep 28 2009 10:26 CET

byThe Sofia Echo staff

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Higher excise duty on cigarettes mulled by Finance Ministry, media report says

Photo: Tsvetelina Angelova

The Finance Ministry plans to raise excise duty on cigarettes to 76 euro for 1000 cigarettes from January 2010, Bulgarian-language Dnevnik daily quoted its own sources on September 28 2009.

If this plan goes ahead, cigarette prices in Bulgaria would increase by an average 30 per cent. Currently, the rate is 52.3 euro for 1000 cigarettes.

One of the most popular brands, Victory, which is currently sold at 3.40 leva a packet, could reach 4.50 leva while Marlboro, currently sold at 3.90 leva, could cost five leva.

The Finance Ministry plans to include the new rates of the cigarette excise duties in the draft bill on the 2010 state budget that will have to be tabled in Parliament by the end of October.

Bulgaria has an agreement with the European Commission to raise the current cigarette excise duty to 64 euro for 1000 cigarettes in 2010, from the current 52.3 euro, which would have been one of the lowest rates in the EU. Now, however, the Finance Ministry is apparently revising its intentions.

"The idea for a higher excise duty comes as a surprise because until a few days ago we were discussing an excise duty of 64 euro," the state-owned Bulgartabak tabacco company, which holds half the cigarette market in Bulgaria, told Dnevnik.

Dnevnik quoted producers and importers who said that the increased excise duty would stimulate contraband and illegal cigarette production.

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