To­bacco tax rev­enues post tem­po­rary rise

Kathimerini English - - Front Page - THANOS TSIROS

The Fi­nance Min­istry has found an un­likely, if tem­po­rary, ally in its ef­fort to keep the tax rev­enues within tar­get in the to­bacco in­dus­try and im­porters of cig­a­rettes and other to­bacco prod­ucts.

In the first six months of the year state cof­fers re­ceived an ad­di­tional 350 mil­lion eu­ros thanks to the ad­vance an­nounce­ment of a hike in the spe­cial con­sump­tion tax on to­bacco as of Jan­uary 2017, a highly un­usual prac­tice as tax hikes are not an­nounced in ad­vance.

When the ru­mors about an up­com­ing in­crease in the tax were con­firmed in May, to­bacco com­pa­nies started in­creas­ing their stock be­fore the new tar­iffs come into force. The cheaper stock could also be used as a weapon for strength­en­ing their mar­ket shares, as even af­ter the tax hike from Jan­uary 2017, the com­pa­nies will be able to sup­ply the mar­ket with­out hav­ing to in­tro­duce a rise in re­tail prices for the first few months.

Mar­ket pro­fes­sion­als say that the com­pa­nies have se­cured stock that can cover be­tween three and five months, de­pend­ing on the pol­icy of each com­pany and its liq­uid­ity. This means that the rise in tax tak­ings this year is ef­fec­tively de­ducted from next year’s rev­enues.

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