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Azerbaijan to increase excise tax on alcohol, tobacco

24 October 2019 [10:45] - TODAY.AZ

By Azernews

By Rasana Gasimova

Starting from January 1, 2020, the Azerbaijani government plans to increase excise tax rates on alcohol, tobacco and energy drinks produced in the country, local media reports.

This is provided for by amendments to the Tax Code submitted for consideration by the Parliament.

According to the amendments, it is planned to increase the excise tax rate for each liter of potable alcohol, vodka, dark alcohol, liquor and liquor products from 2 ($1.18) to 3.2 ($1.88) manats (a 60 percent increase), champagne - from 2.5 ($1.47) to 2.6 ($1.53) manats (a 4 percent increase), wine and wine products - from 0.1 ($0.06) to 0.2 ($0.12) manats (a twofold increase), beer (excluding non-alcoholic) and others drinks containing beer - from 0.2 to 0.5 ($0.3) manats (a 2.5 times increase).

In addition, it is proposed to introduce an excise tax for other light alcoholic beverages not listed in this article in the amount of 0.4 ($0.2) manats per liter.

The tax rate for each liter of cognac and cognac products is proposed to be reduced from 6 to 3.2 manats (a 36 percent decline).

The amendments also provide for an increase in excise rates on cigarillos and cigarettes or tobacco substitutes produced in the country. The excise tax rate will be 31 ($18) manats (a 55 increase for every 1,000 cigarillos or cigarettes (currently the rate is 20 ($11.8) manats for every 1,000).

It is also planned to increase the excise rate on energy drinks by 5 percent to reach 2.1 ($1.24) manats per liter, and on non-alcoholic drinks - by 3.3 percent to reach 3.1 manats per liter.

According to government estimates, increasing excise rates will lead to higher revenues to the state budget.

According to the draft state budget for 2020, excise tax revenues from the Ministry of Taxes are planned to amount to 749 ($440.6 million) million manats, which is 24.4 percent more than those in 2019. At the same time, excise tax revenues from the non-oil sector are expected to amount to 315 ($185.2) million manats, which is 3.2 times higher than the forecast for 2019.

Alcohol is increasingly affecting younger generations and drinkers in developing countries, according to the World Health Organization. Alcoholism is among the top causes of death worldwide, with 4 percent of deaths resulting from addiction to alcohol, causing illnesses and injuries to millions more.

Azerbaijan, which also fights against smoking, adopted the Law “On Restriction of the Use of Tobacco Products” on December 1, 2017.

In accordance with the law, smoking is forbidden throughout the territory of various educational institutions, in hotels, health care facilities, rehabilitation centers, health resorts, social facilities, theaters and cinemas, at exhibitions, reading rooms, libraries, museums and other cultural institutions, in underground and overground crossings, buses (including intercity and international), taxis, metro, air, railway, sea and river transport, bus stops, railway stations, river and sea ports, airports, elevators, common areas of multi-apartment buildings, in buildings and enterprises where flammable substances are stored, on playgrounds, beaches, workplaces of organizations, enterprises, offices, regardless of organizational and legal form and ownership.


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