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Incomes from tobacco excises represent 45.5% of budget incomes coming from excises
Companies in tobacco industry paid about 4 billion euros to the state budget, reported to the 6 billions expected next year from the National Plan of Recovery and Resilience (PNRR), while incomes from excises for tobacco represent 45.5% of budget incomes from excises, said Gilda Lazar, director of JTI Corporate Affairs & Communications, at a specialized conference.
“Everything grows: deficit, foreign debt, inflation, raw material costs, energy costs, production and financing costs. Only recession can result from all this positivism. It is said that in life, we have two certainties: dealth and taxes. And tobacco industry is a big tax payer. Last year companies in this sector paid about 4 billion euros to the state budget, reported to the 6 billions we expect next year from PNRR. The amount is the equivalent of about 1.7% of GDP. Incomes from tobacco excises represent 45.5% of budgte incomes coming from excises. From one year to another, we paid more, in 2021 13% more than in 2020. We do not ask anything from the state, only fiscal predictability and legislative stability. Predictability is a neccesity understood by the present government,” Lazar said.
In the conception of JTI representative, the state needs realistic prognoses, but once the political factor steps in, nothing is valid any more.
“In 2009-2010 cigarette excise grew by 50% in less than a year, which led contraband to over 36% and budget losses to a billion euros. In 2012, a fiscal artifice, through which the then Finance Ministry artificially changed the exchange rate with which excises were calculated, led again to budget income drops. In 2016, when the Tobacco Directive application was delayed on purpose because of certain Health Ministry “specialists” who fought with the industry, not with smoking, we were compelled to get on the market products which had to be withdrawn later. The situation was felt by the budget because the state had to return excises paid in advance,” said Gilda Lazar.
According to the source, since 2020, because of dropping contraband to a historic low of less than 10% ( in July to 6.1%) and a predictable fiscal policy and a regulation frame without radical changes, tobacco became the most solid tax payer. Moreover, in 2020, Romania became the second largest European cigarette manufacturer, after Poland and equal to Germany.
A KPMG study shows that, in 2021, contraband was over 29% in France, Great Britain to 18% and in Ireland to 17%. A smaller black market level than in Romania was recorded in Germany (2%) and Bulgaria (3%).
Representatives of authorities and business participated on Tuesday to the event “Budget and fiscality 2023: what can economy expect,” as part of the conference Rulinf Course.