The project was discussed at the government session and the new excise rates were established.
The project envisages an increase in excise tax rate on tobacco and alcohol from January 1, 2016. Government officials report that the draft law aims to tighten tobacco control measures, approximation to the EU legislation and alcohol excise rate optimization. According to the draft law, from January 1, 2016, excise tax increase is planned on the following products:
– Filter cigarettes (20 pcs) – 0,20 GEL;
– Unfiltered cigarettes (20pcs ) – 0.05 GEL;
– Cigars (one pc and 20 pcs of cigarillos) – 0.4 GEL;
– pipe and chewing tobacco 1 kg – 5 GEL.
- filtered and non-filtered cigarettes (20 pcs) excise tax increases from 5 to 10 percent.
- from January 1, 2016, the excise tax rate increases on whiskey , rum , gin from 10 to 15 GEL, and other alcoholic beverages and ethyl alcohol (except wine and chacha, prepared from distilled spirits, liqueurs and other alcoholic beverages ) excise rate will increase to 10 GEL.
This is not the first increase in excise duties in recent years – in particular, from January 1, the excise tax on a pack of filter cigarettes increased by GEL 0.15 and amounted to GEL 0.90, on non-filter cigarettes – by GEL 0.05 to GEL 0. 25.
Since July 1, a new ad valorem tax of 5% of the cost of a pack of cigarettes was also introduced.
Government explains growth of excise by the obligations assumed before the EU.
Manufacturers and importers of alcohol and tobacco are confident that the excise tax increase is not associated with the recommendations of the European Union, and the government is only interested in growing revenues.
Businessmen also believe that the increase in rates does not serve another declared goal – taking care of people’s health and reduction in the consumption of cigarettes and alcohol.