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Cigarette, alcohol prices may further drain wallets

11 October 2017 [16:29] - TODAY.AZ

By Azernews

By Amina Nazarli

The prices for cigarettes, with a share of 1.92 percent in  country’s total import, will soar in Azerbaijan, since the government is discussing changes in excise tax rates for imported products.

The news, without a doubt, will be hailed by anti-smoking advocates and health experts, since the changes will likely decrease the number of smokers in the South Caucasus country with 47-percent smoking population, who use in the average 15 cigarettes a day.

The amendments will also concern alcoholic beverage.

Aydin Aliyev, chairman of the country’s State Customs Committee, told reporters on October 11 that at present, excise tax rate in Azerbaijan is quite low, so the changes envisage increasing excise rates on imported tobacco and alcohol products.

“Tobacco and alcohol, which are subject to excise tax, are not essential goods. We should first think about the health of the population. In addition, today in Azerbaijan there are enough companies producing tobacco and alcohol products.”

Currently, the excise tax rate on malt beer imported to Azerbaijan is 1 manat per liter; wines from fresh grapes, including fortified wines; grape must is 2 manats per liter; sparkling wines is 2.5 manats per liter; whiskey, vodka, liqueur, rum and other alcoholic beverages is 6 manats per liter.

The excise tax rate is 4 manats per 1,000 pieces of imported cigarettes and cigarillos and 10 manats per 1,000 pieces of cigars.

The price of a pack of cigarettes in Azerbaijan in average amounted at $1.2, while it is $3 in Turkey, $3.5 in Russia, and $4 in Poland.

Earlier in July World Bank’s Lead Health Specialist Patricio Marquez addressing a press conference in Baku offered the government to increase the tax on tobacco products, noting that tobacco tax in Azerbaijan is very low and accordingly prices are low either.

"An increase in the tobacco tax leads to an increase in the revenues of the state budget and to a reduction in the number of smokers. The U.S., Russia, the EU, Ukraine and the Philippines can be cited as an example," Marquez said.

To ease dependence on imports, Azerbaijan recently approved a five-year program for the development of the tobacco production, which will give several privileges to the farmers under the state program for 2017-2021.

Today, domestic production provides only 16-17 percent of consumer demand, and the implementation of the state program will bring this figure to 60-70 percent.

The issue of developing the tobacco industry and challenges ahead were recently a topic of the republican conference in Gakh region, where President Ilham Aliyev stressed that a very serious program will be adopted to boost the tobacco industry.

President Aliyev, addressing the conference, called on to increase the production of cigarettes in Azerbaijan. “Over 10 billion cigarettes are consumed in Azerbaijan. Of these, only 1.6 billion are produced in Azerbaijan, i.e. 9 billion cigarettes are imported,” he said, mentioning that thus currency worth $150 million go abroad for the cigarette import.

Previously, the President signed a decree amending the decree on the state support for the development of tobacco cultivation in the country from October 5, 2016.

The changes introduced to the legislation imply issuing subsidies to those, selling tobacco to legal entities involved in tobacco refinery and individuals involved in entrepreneurship. It will comprise 0.05 manat ($0.02) per kilogram for dry tobacco and per 10 kilograms of raw tobacco.

In January-August 2017, tobacco and tobacco products amounted at $101.914 million were imported into the country, according to the State Customs Committee.


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