Excise on tobacco fills private budgets

Excise on tobacco might be reduced soon since it didn’t produce the results expected by the Government. This possibility was announced the Ministry of Finance, Darko Radunović after the parameters showed that legal tobacco selling is in decline and that, on the other side, tobacco smuggling flourishes. The question that has been asked for months now is whether the excise increase served to fill state budgets or pockets of individuals who earned from tobacco smuggling.

Economic analyst Predrag Drecun says for CdM that the reduction in excise will be good if the results show that the first decision had negative effects.

“Minister Radunović is one of those managers who make decisions very carefully and slowly. I believe that he based his intentions on the analyses carried out very carefully”, said Drecun.

According to Drecun, trying to fill in the budget by increasing excise is not illogical.

“But when the disadvantages of such act are seen, it’s very logical that these measure need to be corrected. Excise should be reduced then, with the aim of trying to depress the grey market. Radunović’s decision is probably based on the bad assessment of the previous decision and I believe we have adequate reaction to that in a very short period of time”, says Drecun.

Vice-President of Democrats, Zdenka Popović, economist, thinks that increase in excise was a catastrophe, totally useless.

“Excise policy should be adapted to our standards and our market. Harmonization with the EU standards should be left for brighter times. Only smugglers have advantages. This is inconceivable in the EU Member States. They are aware that it’s patriotic to pay taxes to the country and not to the some newly composed businessmen” ,she said.

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