Tobacco products to get more expensive in Hungary due to tax changes

As of 1 February, the price of alternative products substituting cigarettes, known as heated tobacco products, will increase significantly. These products have so far not been subject to excise duty. This will change from Wednesday.

In addition, the price of conventional cigarettes may also rise, as the European Commission has drafted a proposal to increase the excise duty on them, vg.hu points out. This means that within a few months, all products may show an increase in price in tobacco shops.

Here is how prices may change in Hungarian tobacco shops

Vg.hu asked Ádám Fischer, cooperating partner of the Niveus Consulting Group, how the price of heated tobacco products might change. In his answer, he explained that currently, the excise duty of HUF 35 is charged per cigarette. Given this fact, it can be calculated that, for example, a packet of 20 cigarettes would be subject to a total excise duty of HUF 700 (EUR 1.79). This means that heated tobacco products will now cost HUF 700 more than before.

Read alsoBig turnaround to come in flour and bread prices in Hungary

Smoke-free alternatives as a solution for quitting smoking

Hungary has a relatively high number of smokers, but several experts believe that alternative, smoke-free tobacco products can provide a solution for quitting. These types of products, even though they are unhealthy, are less harmful than conventional cigarettes. If someone chooses to use them, they are already closer to quitting. And even if they do not quit, they can still expect a longer lifespan thanks to the alternative product, says Dr Emil Toldy-Schedel.

Nevertheless, vg.hu highlights the fact that

a European study also supports the viewpoint of experts who believe that the increase in cigarette prices could further strengthen the black market.

However, differentiated taxation on smoke-free tobacco and nicotine products could also serve as a support for switching to these alternatives, they write.

The conventional tobacco products

The European Commission recently submitted a proposal to increase the excise duty on conventional cigarettes. Fischer was asked about the excise duty on the conventional tobacco products by vg.hu earlier. Fischer points out that the excise duty has long been determined by the EU, since it is indirect tax (shifted to the consumer), which could cause serious distortions in the market if such taxes were regulated differently.

The EU currently regulates excise duty on tobacco products as follows. The tax must be at least EUR 90 per 1000 cigarettes, but it also must reach 60 percent of the sale price. The change in cigarette prices is due to the EU’s continuous increase of the minimum excise tax amount. There is a high possibility that this amount will change in the coming months, although it is still unknown by how much the EU would increase it.