Smokers annually pay 2.7 billion euros to the state, 2.1 billion euros in tobacco taxes and 600 million euros in VAT. On average, cigarettes will become 30 cents more expensive in 2023. But prices are also generally high in neighboring countries and importing via the trunk is hardly worth it anymore.
Smokers will light up approximately 11.3 billion cigarettes in 2023, according to a study by the manufacturer JTI. By spending 3.8 billion euros, the state earns well. Including sales tax, 76 percent of the price of a package (average 5.77 euros) goes to the Tax Authorities.
At 2.1 billion euros per year, the tobacco tax is the second largest consumption tax, after the tax on mineral oils. What remains is divided between tobacconists (53 percent) and industry (47 percent).
11.6% of cigarettes are not taxed in Austria
Although cigarette prices have risen, tax revenues have stagnated. JTI spokesperson Ralf Lothert: “We interpret the fact that, despite the relatively significant increases of 30 cents, tax revenues have only remained stable and have not increased as an indication of the need for reform.” According to JTI, the lower tax on alternatives such as tobacco heaters (7 percent share) or e-cigarettes costs the state a high double-digit million amount every year.
The Minister of Finance is missing out even more, with 285 million euros due to tobacco that was not taxed in Austria. 11.6 percent of the cigarettes smoked here come from abroad or from the black market.
There is often little savings to be made when crossing the border
The savings potential in the surrounding countries has become smaller. In some countries, politicians have intervened with higher taxes, which has reduced the price difference here. The level is comparable in Hungary and the Czech Republic, but higher in Germany. In Slovenia, Italy and Slovakia, suitcase transport is even more profitable for smokers.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
