To­bacco price to rise fol­low­ing tax hike

Azer News - - Business - By Dur­dana Yusi­fli

The taxes on to­bacco prod­ucts have been raised in Azer­bai­jan, as the Par­lia­ment at a ple­nary meet­ing has adopted amend­ments to the Tax Code.

The new amend­ments pro­vide for an in­crease in the ex­cise tax for pro­duc­tion of ci­gars and cigar­il­los in the coun­try.

Thus, from now on, a tax of 20 man­ats ($11.7) will be levied for ev­ery 1,000 ci­gars pro­duced in Azer­bai­jan. Pre­vi­ously, this tax amounted to 10 man­ats ($5.8).

Hasan Nagvi, Head of the World Bank in Baku of­fice, said that the taxes on to­bacco prod­ucts in Azer­bai­jan should be in­creased.

He said that low taxes on to­bacco prod­ucts lead to two prob­lems. First, the gov­ern­ment re­ceived less profit from the to­bacco in­dus­try. Sec­ondly, low taxes on to­bacco prod­ucts caused cheap­ness of cig­a­rettes and their avail­abil­ity, which led to their ex­ces­sive con­sump­tion of them.

“Dur­ing the year, we re­peat­edly sent our pro­pos­als to the gov­ern­ment, and we are glad that the min­istries of tax and health have a full un­der­stand­ing of this is­sue,” Nagvi said

Head of the World Bank in Baku said that Azer­bai­jan could ben­e­fit from Turkey's ex­pe­ri­ence in this mat­ter.

Thus, the in­crease in the price of to­bacco prod­ucts in Turkey caused not only an in­crease in the col­lec­tion of taxes by 175 per­cent, but also a 16 per­cent de­crease in cig­a­rette sales. Now the cig­a­rette tax in Turkey is about 75 per­cent of the cost of cig­a­rettes, ac­cord­ing to Nagvi.

In Jan­uary-April 2018, to­bacco prod­ucts amount­ing to 11.51 mil­lion man­ats ($670,000) were pro­duced in Azer­bai­jan, ac­cord­ing to the State Sta­tis­tics Com­mit­tee.

Dur­ing the re­port­ing pe­riod, Azer­bai­jan ex­ported to­bacco and its in­dus­trial sub­sti­tutes worth $3.99 mil­lion, im­ported - worth $34.93 mil­lion. In com­par­i­son with Jan­uaryApril, 2017, ex­ports de­creased by 25.61 per­cent, im­ports - by 22.51 per­cent.

In late De­cem­ber, Azer­bai­jan adopted the law “On Re­stric­tion of the Use of To­bacco Prod­ucts”.

In ac­cor­dance with the law, smok­ing is for­bid­den through­out the ter­ri­tory of var­i­ous ed­u­ca­tional in­sti­tu­tions, in ho­tels, health care fa­cil­i­ties, re­ha­bil­i­ta­tion cen­ters, health re­sorts, so­cial fa­cil­i­ties, the­aters and cin­e­mas, at ex­hi­bi­tions, read­ing rooms, li­braries, mu­se­ums and other cul­tural in­sti­tu­tions, in un­der­ground and over­ground cross­ings, buses (in­clud­ing in­ter­city and in­ter­na­tional), taxis, metro, air, rail­way, sea and river trans­port, bus stops, rail­way sta­tions, river and sea ports, air­ports, el­e­va­tors, com­mon ar­eas of multi-apart­ment build­ings, in build­ings and en­ter­prises where flammable sub­stances are stored, on play­grounds, beaches, work­places of or­ga­ni­za­tions, en­ter­prises, of­fices, re­gard­less of or­ga­ni­za­tional and le­gal form and own­er­ship.

Al­lo­ca­tion of places for smok­ing will be trans­ferred to the dis­cre­tion of em­ploy­ers. In ad­di­tion, mu­nic­i­pal­i­ties are given new pow­ers to take ac­tion against the use of to­bacco prod­ucts. They will take steps to re­strict the use of to­bacco prod­ucts.

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