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Iva Khasia Forecasts Uncontrolled Inflow of Tobacco Products after Excise Rate Growth

Iva Khasia Forecasts Uncontrolled Inflow of Tobacco Products after Excise Rate Growth

JTI communications specialist Iva Khasia says that the tobacco product regulatory bill initiated by MP Guguli Maghradze was submitted to the Parlaments in haste. Khasia told BPI news agency that the bill authors have not passed consultations with either business sector or the Government.

«Initially, when we started discussing the bill, we were at the parliament. In reality this bill was submitted in haste. Consultations were not held with either the business sector or the Government. Consequently, the bill has not reflected many important issues.

According to my information, the Government has forwarded due recommendations to the bill authors and a number of issues has been analyzed in those recommendations.

At this stage, we remain in waiting regime for how the recommendations will act. When the revised bill will be divulged, naturally, additional comments will be made.

Khasia also commented on cigarette excise tax growth issues and noted that higher excise rate may provoke illegal inflow of tobacco to the Georgian market.

«Starting 2013 the excise rate has been growing year by year, in practice. The year of 2014 was an only exception, when the excise rate did not increase. Naturally tobacco price depends on excise rate. When the excise rate grows, the process also affects prices.

Currently, I cannot make precise comments on long-term perspectives. Today, the cigarette price is far higher compared to Armenia. When the difference considerably grows, it is possible that tobacco products be imported illegally.

Similar regretful experience took place on the Georgian market in 2005. In that period excise rate increased unreasonably at high paces. Consequently, this fact narrowed the legal market and made nagtive affect on budget revenues.

The TJI representative says that the tobacco business representatives should be involved in any process related to tobacco industry.

«Naturally, any issues that directly refer to the business should not be resolved without consultations with the due business sector», Khasia noted.