Increase in the price of cigarettes: news from the draft of the 2023 budget bill

Increase in the price of cigarettes: news from the draft of the 2023 budget bill
Increase in the price of cigarettes: news from the draft of the 2023 budget bill
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The draft is made available 2023 Budget Bill approved by the Council of Ministers and containing all the news on tax matters for the year 2023. The text is now awaited in Parliament.

The draft brings news for the pockets of smokers, in particular, in the field of tobacco, with Article 28, starting from 1 January 2023, the price paid for each pack of cigarettes would increase. The text speaks of an increase that could vary between 15 and 20 euro cents.

The targeted intervention on excise duties on tobacco and substitute products, i.e. heated tobacco and electronic cigarettes, provides for a gradual increase in the specific component accompanied by an increase in the minimum tax burden declined over three years.

For new substitute products, the increase in excise duty, already envisaged on 1 January with last year’s budget law, continues and will continue for the next three years.

Starting from 1 January 2023, the increase for electronic cigarettes should be set at 15% for products with nicotine and 10% for those without.

Tobacco and the price of cigarettes: the indications of the Customs

THE manufactured tobacco, according to EU and national legislation, are subject to excise duty. The following products are considered manufactured tobacco:

  • Cigarettes
  • Cigars
  • Cigarillos
  • Fine-cut tobacco to be used for rolling cigarettes
  • Snuff and chewing tobacco
  • Other smoking tobaccos (pipe tobacco, water pipe tobacco, plant, herb or fruit based smoking products: hookah molasses)
  • Smokeless inhalation tobacco

The retail price of manufactured tobacco is set by the Customs and Monopolies Agency in accordance with that established by the producers or importers.

By provision of the Customs and Monopolies Agency, the public sale prices of manufactured tobacco are entered in the breakdown tables, divided by type of product, which highlight the individual items that make up the price, namely:

  • excise duty
  • VAT
  • Agio
  • Fee to the supplier

Price of cigarettes: what it consists of

As for cigarettesunlike other manufactured tobaccos, the excise duty corresponds to the sum of a fixed component and one proportional to the retail price; the components are calculated starting from a base rate set at 59.8%.

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All categories are subject to VAT to the extent of 22% of the retail price net of VAT itself and to the excise duty which varies according to the category.

A minimum tax burden (VAT + Excise) is set for cigarettes – equal for the year 2022 to Euro 194.72 per conventional kilogram/1000 cigarettes.

The premium due to the retailer (tobacconist) is equal to 10% of the retail price.

The producer’s fee, which also bears the distribution costs, is given by the difference between the retail price and the amounts resulting from excise duty, VAT and premium.

We are now awaiting the news relating to the sales prices for 2023 based on the draft of the Budget Bill.

For more details on tobacco and related products, you can consult the ADM website

The article is in Italian

Tags: Increase price cigarettes news draft budget bill

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