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From February, the excise duty will not change for traditional cigarettes, only for heated tobacco products, but the European Commission is already discussing an increase for the former, and the price of cigarettes could rise significantly in a few months, reports financial news portal Világgazdaság.
The price of tobacco products includes several taxes, the two most important of which are excise duty and VAT. VAT is 27 percent in Hungary, with a few exceptions, and is charged on the final, net price to the consumer.
In the relationship between excise duty and tobacco, the EU sets a double minimum: it must be at least €90 per 1,000 cigarettes and reach 60 percent of the selling price. The variation in the price of cigarettes is due both to the fact that the minimum amount is constantly being increased by the EU – and may increase further in the coming months – and to the fact that the minimum excise duty in forint will increase as the forint exchange rate depreciates, even if the EU’s euro value remains unchanged.
As with cigarettes,
herbal and herbal infusions will soon be available only in tobacconists’ shops and their sale online will be banned.
This will cost 24,000 HUF (EUR 60) per 1,000 fibres and 23% of the retail price, but at least 37,300 HUF. All in all, a box costing 2,000 (EUR 5) forints includes 425 forints in VAT and 940 forints in excise duty. In addition, of course, other taxes such as corporation and business tax must be taken into account in economic terms when setting the selling price.
In February, this system and the excise duty on cigarettes will remain unchanged for the time being, but there have already been indications that the tax burden will be increased. However, it is already a fact that heated tobacco products – essentially alternative products to cigarettes that emit an inhalable substance by heating without burning tobacco – will remain exempt from excise duty only for a few days. From February they will be subject to excise duty of 35 forints per unit, which amounts to 700 (EUR 1.8) forints per pack assuming a 20-fibre pack.
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