site.btaParliament Adopts Phased Increase in Excise Duty on Cigarettes, Tobacco Products

Parliament adopted a four-year excise duty calendar for cigarettes and other tobacco products. This was done through amendments to the Tax and Social Insurance Procedure Code voted on second reading, which amended several laws, including the one on excise duties and tax warehouses.

According to the adopted excise duty calendar, the specific excise duty on cigarettes will be BGN 117.5 per 1,000 pieces from 1 March 2023; BGN 126 per 1,000 pieces from 1 January 2024; BGN 134.5 per 1,000 pieces from 1 January 2025 and BGN 143 per 1,000 pieces from 1 January 2026.

Regarding the proportional excise duty, the lawmakers decided on a rate of 23.5% of the selling price from 1 March 2023; 22% of the selling price from 1 January 2024; 20.5% of the selling price from 1 January 2025, and 19% of the selling price from 1 January 2026.

The amount of excise duty on cigarettes should not be less than BGN 185.50 per 1,000 pieces from 1 March 2023; BGN 194 per 1,000 pieces from 1 January 2024; BGN 202.50 per 1,000 pieces from 1 January 2025 and BGN 211 per 1,000 pieces from 1 January 2026, the proposed excise duty calendar further stipulates.

The main thing this parliament should aim to do is to curb smoking, said Assen Vassilev, co-chair of Continue the Change. According to him, this is done not only by raising the excise tax but also by banning cigarette advertising.

Persons who produce e-cigarette liquids containing nicotine - in case they apply for a license to operate a tax warehouse under this law by March 31, 2023 - may continue their activities until the Director of the Customs Agency makes a decision, but no later than September 30, 2023, subject to the provisions regarding the obligations of licensed warehouse keepers, the MPs decided.

The amendments to the Value Added Tax Law also introduce into Bulgarian legislation the requirements of a European directive to automatically exchange information obtained from digital platforms about traders operating through these platforms.