Czech Cigarette Duty Raised To EU Minimum

Source from:  Tax-News.com  08/05/2014

The Czech Republic has passed legislation raising the excise duty on a packet of cigarettes by CZK3-4 (USD0.15-0.20) to bring its rates into line with European Union law.

The move was voted through by the country's lower house. However, it was also required under European Union law, following a dip in the value of the Czech koruna against the euro.

Minimum excise duty rates were raised in the European Union by Council Directive 2010/12/EU of February 16, 2010, which prescribed that on January 1, 2014, the overall excise duty (specific duty and ad valorem duty excluding VAT) on cigarettes shall represent at least 60 percent of the weighted average retail selling price of cigarettes released for consumption. It requires that excise duty rates shall not be less than EUR90 (USD120.8) per 1,000 cigarettes irrespective of the weighted average retail selling price. This was up from 57 percent and EUR64 per 1,000 previously. Minimum excise duty rates will again be raised from 2018.

The Minister of Finance, Andrej Babiš, said that failure to act would have made it necessary to raise the value-added tax burden instead. The hike is expected to raise an extra CZK2.8bn. Enditem