They are taking excise tax seriously. Deputy minister announced the future price of a pack of cigarettes

Deputy Minister of Finance Jarosław Neneman announced that his ministry, together with the Ministry of Health, decided to reform the excise duty system on tobacco products. Today, we have one of the lowest levels of this tax in the European Union: the equivalent of an average of 2.05 euros.

Ministries want higher excise tax on cigarettes

Higher excise duty will translate into higher prices for cigarettes, which in turn may discourage some smokers or at least encourage them to reach for tobacco products less often. This is one of the few tools the state has in the fight against addiction: campaigns promoting a healthy lifestyle bring worse results than hitting smokers in the pockets.

Finance Minister Andrzej Domański announced a few days earlier that excise tax on cigarettes is planned to be increased by 25 percent compared to the current schedule of annual increases until 2027.

Deputy Minister Neneman revealed that the ministry wants to impose excise tax on all products containing nicotine, because not all of them are currently subject to it. That’s not all. – We are also proposing a PLN 40 fee on vaping devices. It would affect both disposable and reusable devices, i.e. all devices – he said.

If the excise duty goes up, the ministry estimates that the price of a pack will increase to PLN 26-27. Neneman also reassured smokers: media headlines that cigarettes will cost PLN 30 per pack are exaggerated. As you can see, only by a few zlotys. Currently, smokers spend PLN 17-18 per pack in the store every time.

There will be no more blows to unhealthy habits: no additional increases in excise duty on alcohol are planned this year.

Impact on the market and consumers

Experts warn that sudden and drastic increases in excise duty may seriously disrupt market balance and cause growth of the grey zone. Warsaw Enterprise Institute and Business Centre Club criticize the decision of the Ministry of Finance, claiming that it is another example of the pathology of Polish economic legislation.

BCC excise tax expert Szymon Parulski points out that the Ministry of Finance has not presented an assessment of the impact of the regulations on the proposed solutions. Parulski adds that already in the second year of new increases, excise tax revenues may be lower than in the case of continuing the current excise tax map.

The future of the tobacco market

According to data from the National Tobacco Industry Association, cumulative increases in excise duty on tobacco products in 2022-2027 are to amount to 109% for cigarettes, 165% for smoking tobacco, and 401% for tobacco heater inserts. In the case of e-cigarette liquids, excise duty will increase by 228%. Experts indicate that such increases could have far-reaching consequences, not only for the tobacco industry, but also for consumers and small and medium-sized enterprises.

Market representatives appeal to the Ministry of Finance to maintain the current solutions, which ensured stability and predictability. Magdalena Szewczyk-Pochrzęst notes that the excise map, despite initial doubts, worked very well, bringing stable revenues to the state budget and reducing the grey zone.