A standard pack of cigarettes in Cyprus could rise from around €4 to €4.50 today to €6 to €6.50 under the planned revision of EU tobacco taxation, according to Customs Department spokesman Giorgos Konstantinou. He stressed, however, that no agreement has yet been reached at European level and that any increases would be introduced gradually.
Tax increase still on the table
Speaking to Politis Radio 107.6 and 97.6 on the programme “Defteri Matia” with Andri Daniel, Mr Konstantinou said the talks at ECOFIN had not produced an agreement. Even so, a possible rise in excise duty on tobacco products remains on the table.
He said the relevant tax rates were last adjusted in 2011, 15 years ago.
From €4 to €4.50 now to €6 to €6.50 a pack
Asked how large the increases might be, Mr Konstantinou first said that without an agreement, the new tax rates and final prices cannot be set with certainty.
Based on the discussions so far, he estimated that the price of a conventional pack of cigarettes in Cyprus could rise from about €4 to €4.50 today to €6 to €6.50.
“We are not going to see” prices of €10 or €13, he said, adding that Cyprus had sought to limit the size of the increases.
He also stressed that the changes would not happen overnight. Transitional periods will be provided so that the financial burden on consumers is spread over time.
Similar increases are expected to be considered for other categories of tobacco products.
Why the EU is reviewing tobacco taxation
According to Mr Konstantinou, three main reasons are behind the EU’s review:
- Public health: the World Health Organization is pressing for higher prices to reduce tobacco consumption because of the illnesses and deaths linked to smoking.
- Large tax gaps between member states: some countries impose very high taxes, so cigarette prices there are several times those in Cyprus. Cyprus is among the countries that apply the lowest permitted tax rates.
- New products: there is a need to set tax rules for new product categories, such as nicotine pouches, heated tobacco products and e-cigarettes with vaping liquids.
What Cyprus secured in the negotiations
Mr Konstantinou referred to the work done during the Cyprus Presidency of the EU. Although no final agreement was reached, all 27 member states agreed that transitional periods should be included. This means any increases would be introduced over time rather than immediately.
He added that Cyprus worked to keep the proposed increases in the minimum tax rates as low as possible. According to Mr Konstantinou, proposals had been put forward during the talks that could have led to much larger increases, bringing prices close to those in some other European countries.
No final deal or timetable
Mr Konstantinou said the aim of tax policy is to reduce the consumption of tobacco products. He expressed hope that measures to support people’s finances would also be introduced.
For now, there is no final European agreement and no set timetable for any new increases.
