EU Adaptation: First Price Increases in 2017

From the beginning of 2017, new retail prices for cigarettes will be in effect in Bosnia and Herzegovina. According to calculations previously submitted to the Indirect Taxation Authority (UIO) by major manufacturers and distributors in BiH, cigarettes will be more expensive starting tomorrow by an average of 20 – 30 feninga per pack, depending on the type and manufacturer. The new retail prices for cigarettes, which will be in effect from the beginning of 2017, have been determined in accordance with the Decision on determining the special and minimum excise duty on cigarettes and the amount of excise duty on smoking tobacco for 2017, adopted by the Management Board of the Indirect Taxation Authority.

The Decision on determining the special and minimum excise duty on cigarettes and the amount of excise duty on smoking tobacco for 2016 stipulated that from 01/01/2017, the following excise duty will be paid on cigarettes: a proportional excise duty at a rate of 42% of the retail price of cigarettes and a specific excise duty in the amount of 67.50 KM per 1,000 pieces, or 1.35 KM per pack of 20 pieces.

If the total excise duty on cigarettes (proportional + special), calculated according to the above rates, is less than the minimum excise duty, then the minimum excise duty of 2.42 KM per pack of 20 cigarettes is paid.

The excise duty on smoking tobacco in 2017 is determined to be 80% of the minimum excise duty on cigarettes in 2016, amounting to 96.80 KM per kilogram.

The decision represents a continuation of the harmonization of excise policy in BiH with the excise policy on cigarettes in the European Union.

Taxable persons and other entities involved in the trade of cigarettes and tobacco are obliged to take an inventory of their stocks as of 01/01/2017 and submit the inventory lists to the competent regional center of the UIO by 07/01/2017. They are also obliged to inventory and submit to the UIO inventory lists for unused old excise stamps. The difference in excise duty must be calculated on the existing stocks in accordance with the Decision on determining the special and minimum excise duty on cigarettes and the amount of excise duty on smoking tobacco for 2017, and must be paid into the Single Account of the UIO by 17/01/2017.