Prices of all cigarettes in Montenegro are €0.30 higher as of today, due to increased excise taxes on tobacco products, Dnevne Novine writes.
New excise duties, defined by the amendments to the Law on Excise Taxes passed in the Parliament last week, are applied as of today. The calculation of prices in retail facilities will be completed no later than 7 August.
The adopted amendments are part of the government’s austerity measures aimed at fiscal consolidation, ie reducing public debt and deficit. In addition to increasing excise taxes on cigarettes, the measures include VAT increase from 19% to 21% as of 1 January 2018, and increase in excise duties on alcohol, soft drinks and coal.
Budget revenues on this basis should be increased to €4.6m this year, €17.8m in 2018 and €13.2m in 2019.
By 2020, the government plans to raise €35.6m from increasing excise taxes on tobacco products.
“On this basis, budget revenues will increase by €4.6m this year, €17.8m next year and €13.2m in 2019. The total effect in three years would be €35.6m,” the fiscal consolidation strategy states.
Excise taxes on tobacco products and alcohol will continue to grow in the coming years in order to match the EU standards. The planned state revenue on this basis amounts to €70m.
Commenting on the increase in excise taxes, professor Miro Blecic told Dnevne Novine that in economic terms, any form of burden is a burden for citizens. He also pointed out that the measures were an inevitable part of the process EU accession and that aligment of fiscal regulations with EU standards is expected to be completed by 2022.
