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Price increase on tobacco products

08 Apr 2021. After years of not complying with EU regulations on tobacco excise tax, the country has now hiked its taxes for the second time in one year, reports Hungary today.

A statement by the Court of Justice of the European Union’s (CJEU) has finally driven Hungary to raise its tobacco prices in accordance with EU regulations. These stipulate that the excise tax on tobacco products must reach 60 per cent of the average retail price but at least EUR 90 (USD 106.9) per 1,000 cigarettes. It does not apply to prices over EUR 115 (USD 136.59) per 1,000 cigarettes.

The EU felt that Hungary had been distorting competition within the bloc whilst the Hungarian government stated that the EU regulations did not take into account that countries on the EU’s eastern borders have to fight hard against cigarette smugglers and black-market imports, according to Hungary today.

However, ultimately Hungary raised the excise taxes on tobacco products by 7.3 per cent on 1 January and again by 4.8 per cent on 1 April, taking the price of a pack of cigarettes to an historic high. A pack now costs HUF 1,700 – 1,800 (USD 5.60 – 5.94), which means smokers that smoke one pack a day would be spending around HUF 51,000 to 55,000 (USD 168.23 – 181.43) a month, amounting to about half of the current net minimum wage, reports Hungary today.