Council of Ministers delayed with moratorium on cigarette excise tax increase, new prices effective today

SARAJEVO, (Patria) - The BiH Council of Ministers, at one of its last sessions last year, determined the Bill on Amendments to the Law on Excise Duties in Bosnia and Herzegovina with the aim of stabilizing revenues and the market for tobacco products.

The amendments to the Law establish the specific excise duty on cigarettes in 2019, 2020, and 2021 at KM 75.00 per 1,000 pieces, or KM 1.50 per pack of 20 cigarettes, thereby introducing a moratorium on further increases in cigarette excise duties.

Following the prepared revenue projection, an increase in revenue is expected in the current year (2018) by KM 37.3 million, in 2019 by KM 39.4 million, and in 2020 by KM 41.6 million.

The Management Board of the Indirect Taxation Authority is obliged to analyze the effects of the moratorium on the increase of the specific excise duty on cigarettes by March 31, 2021.

However, before this moratorium, the ITA had previously made a decision, and new cigarette prices are effective in Bosnia and Herzegovina as of today.

The Indirect Taxation Authority of Bosnia and Herzegovina (ITA BiH) reminds that, in accordance with the decision on determining the specific and minimum excise duty on cigarettes and smoking tobacco for 2019, a proportional excise duty of 42 percent of the retail price and a specific excise duty of KM 1.65 per pack will be paid per pack of cigarettes.

An excise duty of KM 114.40 will be paid per kilogram of smoking tobacco.

The new prices are a continuation of the harmonization of excise policy in BiH with the excise policy on tobacco and cigarettes in the European Union.

Taxpayers and other persons engaged in the trade of cigarettes and smoking tobacco in Bosnia and Herzegovina are obliged to submit inventory lists of cigarettes and smoking tobacco with the inventoried stocks of these excise products as of January 1, 2019, by January 7.

In addition to cigarettes and smoking tobacco, taxpayers are obliged to list the quantities (stock) of excise stamps for marking cigarettes and smoking tobacco, which were taken over by the ITA and not used for marking these excise products by the end of 2018, calculate the difference in excise duty for payment, and submit these inventory lists to the ITA by January 7.

The difference in excise duty on the inventoried stocks must also be paid by January 17, 2019.

Tobacco products for which the difference in excise duty has been paid, in accordance with the decision, can be sold until the stocks are depleted at new retail prices, which must be displayed in a visible place in the retail outlet, the ITA BiH warned.