NGO asks Ministry of Finance to consider raising tobacco excise tax

The Center for Health Policies and Studies (PAS Center) is asking the Ministry of Finance to consider raising excise taxes on tobacco and related products for the next year as “an effective and important means of reducing tobacco consumption by various segments of the population, in particular young persons”.

PAS Center cites Article 6 of the WHO Framework Convention on Tobacco Control, which recommends governments to adopt tax and pricing policies on tobacco products so as to contribute to the health objectives aimed at reducing tobacco consumption.

PAS Center suggests that the minimal excise tax on cigarettes, both filtered and non-filtered, as well as on sticks for heated tobacco products should be increased to 1,006.38 lei per 1,000 units. The tax rate on cigarillos should be kept at 41%, provided that it’s not lower than 1,006.38 lei per 1,000 units. One liter of e-liquid should be taxed at 1,957 lei in 2022, according to PAS Center.

The NGO recalls that by adopting the Association Agreement with the EU, Moldova has pledged to raise excise duties to at least 90 euros per 1,000 cigarettes by 2025.

To minimize the risks of smuggling, the Agreement says that the implementation of European rules will take into account regional particularities related to the level of excise duties on tobacco products. PAS Center notes that in Ukraine, besides excise duties on tobacco and related products, an additional excise duty on retail trade of 5% applies to all tobacco and related products. Therefore, cigarettes in Ukraine are 1.4-17.5% more expensive than in Moldova. HTP sticks in Ukraine are also 8.1-12.6% more expensive than in Moldova.

“Revenues from the taxation of tobacco products may provide the Government with additional funds to implement tobacco control measures in all relevant sectors (public health, education, home affairs, public order, including to combat smuggling and illicit trade in tobacco products), for strengthening the health system, especially for increasing transfers to the state budget for compulsory health care for the categories of unemployed people provided by the Government, as well as for public health measures in the fight against the COVID-19 pandemic,” says PAS Center.

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