When we visited the UK last winter, a friend bought a packet for 21 pounds and change. I thought he was mad for actually still smoking. Nowhere near like that in Cyprus obviously, but a 7,50 packet might be on the cards soon and this will hurt the cracking pockets of many.
The 24 Hour Kiosk Owners Association, member of the Chamber of Commerce and Industry told the Customs Department Director during a recent meeting, that if upwards amendments to the minimum consumer tax on tobacco products actually go through, this could be the short term market reality.
The Association noted in a statement that in light of deliberations across the EU to review the tobacco products minimum taxation, it had submitted 'well documented positions on the significant repercussions' that might prevail following a European Commission proposal to raise the tax.
The 20 cigarette packet in Cyprus could go from 4-5 euro up to 7 or 7.50, hurting legal vendors, as consumers might look to the north, or rather look even more to the north, for smuggled cartons and packets.
The Association said that cigarettes from the non-government controlled areas now amount to around 13% of cigarette consumption and 53% of loose tobacco for rollies. The loss for public coffers in taxation amounts to more than 50 million.
During the meeting with the Customs Director, there was also agreement on the need to raise penalties on tobacco products smuggling as well as modernise customs operations, utilising more effective means of control at crossing points.
'We do recognise public health issues with smoking and the importance of limiting such harmful effects,' the Association underscored, noting however that taxation policies should be balanced, documented and effective to prevent 'undermining the legal market.'
The Kiosk and 24 Hour Service Owners might also be meeting the Finance Minister in the near future.
Source: CNA