Ministry of Finance responds to increased cigarette price
By Gvantsa Gabekhadze
Tuesday, January 5
The price on some cigarettes has increased in Georgia from the New Year, which has already caused negative responses from consumers.
Responding to the negative reactions, Georgia’s Ministry of Finance has stated that the recently-introduced bill envisaging the growth of excise tax on tobacco and alcoholic products and had nothing to do with current political developments.
According to the Ministry, the price increase was related to “a misbalance between supply and demand on a certain category of cigarette, not all of them.”
On December 11, last year, the Parliament of Georgia approved a bill to increase excise tax on cigarettes and alcohol according to which tax would increase: Filtered cigarettes - by 0.20 GEL (per 20 units); and Non-filtered cigarettes – by 0.05 GEL (per 20 units).
The proportional interest rate would also increase by five to 10 percent on filtered and non-filtered cigarettes, according to the bill.
The amendment, which was highlighted to be necessary for “Georgia’s coming closer to Europe”, immediately caused protests amongst tobacco importers.
They stressed that that the tax increase would have a flow-on effect and the price of cigarettes in Georgia would also increase.
The cigarette importers also warned the new taxes would encourage the smuggling of cigarettes into Georgia.
Lawmakers of the Georgian Dream ruling coalition stated that such amendments were necessary due to the Georgian-European Union Association Agreement signed in 2014.
Several of them even stated that the increase of price on “unhealthy product” would provoke giving up the “bad habit” amongst smokers.
