The government also increases tobacco tax due to the budget hole. If the manufacturers pass on the taxes, the price increases can be just as high than ever. The tobacco meals concern and the industry also increases the alarm.
It will be more expensive for smokers. According to Statistics Austria, cigarette prices are more than five percent more expensive than in the previous year, while inflation is “only” about three percent. The government has already increased the tobacco tax in April and hopes this year an additional 50 million euros – cigarette prices increased on average by 30 cents per pack.
Next year the extra income with 100 million euros must be twice as high. Ralf Wolfgang Lothert from Tabakrießen JTI assumes “mass market errors”. The higher taxes can be reflected in even larger increases. If the industry simply turns the load, it should rise to 50 to 60 cents per package.
From 2027, the government intends to resume 200 million euros
From 2027, the extra income will even be 200 million euros. Dated by the chairman Wolfgang Streißnig is also worried: “As a result, the transformers come under pressure.” After the higher gambling tasks the following bad news. This year alone, a series of nine million euros escaped due to tobacco tax.
Nevertheless, the question is whether the invoice will work for the state. “Other countries show that a high tobacco tax can quickly become a boomerang,” says Philip Morris spokesperson, Sebastian Winter.
At the moment, twelve percent of the volume is not taxed in Austria, and the share will probably continue to rise in price increases. Every percentage point more costs the state 25 million euros. “Austria is all the country with the highest part of the border sale,” says Streiesig. Many consumers then go to neighboring countries and buy cigarettes there. “In many regions of Austria, the border can be reached in 30 to 60 minutes,” said Aziz Aliev von Bat. The result can also be more smuggling.
New “nicotine tax” on alternative products 2026
However, the tax increase also influences alternatives. With tobacco for heating, the manufacturer Philip Morris has passed the load at half and adapted approximately 50 cents. With the alternative products (e-cigarettes and the so-called bags), a new nicotine tax is also to bring 85 million euros. That should make these products considerably more expensive.
Simone Pibernik of the fourth largest manufacturer Imperial Tobacco: “The control model of recent years has shown that tax revenues are constantly increasing with moderate tax steps.” The now planned steps would have a huge extent.
Traffic chairman complains about stress
Winter from Philip Morris hopes for a dialogue with the industry. Trafican chairman Streißnig has little understanding of the many burdens that depend on the tobacco meals. “Why do we have to contribute so much to budgetary defeating? Both the higher taxes on gambling and the increase in tobacco tax has an influence on the custody of tobacco. Seller, especially in the country, can get into difficulties.
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.
