Bulgaria needs changes in its cigarette taxation

One Bulgarian became a member of EU states it must introduce some changes in all its spheres, beginning with its policy till its business.

An example of changes that must be introduced offered manager of tobacco taxation in Europe at the Belgian representation of British American Tobacco (BAT) Francois Osete that affirmed: “Bulgaria has to increase the excise on tobacco products in order to meet European Union requirements.”

Recently, British American Tobacco was gained for a conference where was discussed the market development of its tobacco products. Major problems that were discussed within conference were related with new cigarette taxation and illegal commercialization of smoking tobacco.

According to the standard limit for excise on tobacco products of countries that belong to EU, every state must to accomplish the minimum level of 64 euro per 1000 cigarettes and 57 per cent of the retail price.

What about Bulgaria, as sustain Francois Osete, “it has not reached the minimum level of 64 euro,”

It was offered to Bulgaria three years in order to resolve the planned problem. So, till 2010 Bulgaria will develop into a real EU country with all conventional requirements and novelty.

“Bulgaria should reach the minimum excise levels bit by bit,” Osete said.

As it was also sustain, European governments need to introduce a mixed taxation regime combining ad valorem and specific component of taxation tools. Ad valorem component is a percentage of the retail price and the specific component is a fixed sum in euro per 1000 cigarettes.

At the named discussion, participated senior investigations manager at BAT headquarters in London, Terry Hobbs. About this problem, Hobbs said: “Counterfeit is not the biggest problem but tax evasion is.”

Also, he added: “It was estimated that annual company losses from illicit trade around 60 million pounds. The figures for Bulgaria show that between five and 12 per cent of consumption results from illicit trade. Sensible taxation and more effective control in free trade zones feature among BAT recommendations for the prevention of illicit trade problems.”