Croatia Imposes New E-Liquid Tax, Hikes Tobacco Duties from July 1st
Croatia is set to introduce a new excise duty on e-liquids used in electronic cigarettes (vapes) and increase existing taxes on other tobacco products, effective July 1st. The move, part of a government decree amending excise regulations, has caused significant concern among vape retailers, who warn it could lead to drastic price hikes and potentially the end of business for many.
Under the new regulation, e-liquids will be subject to an excise duty of €0.20 per milliliter. Previously, while e-liquids were in an excise category, the duty was set at zero euros. This new levy is expected to cause substantial price increases for consumers. Filip Tokić, a board member of vape company Dotmod, stated that e-liquid prices could rise by 100% to 500%. “For example, a bottle that previously cost €10 will now cost €40. Few will want to buy a product with such an uncompetitive price,” Tokić said. Retailers also face uncertainty regarding whether the new duty applies to existing stock or only new supplies and lack clarity on product marking and advance payment requirements from the Ministry of Finance.
The decree also raises excise duties on traditional cigarettes, with the specific excise increasing from €53.10 to €56.10 per thousand cigarettes, while the proportional excise of 34% of the retail price remains unchanged. The minimum excise on cigarettes will rise to €124.20 per thousand. Taxes on fine-cut tobacco for rolling and other smoking tobacco (cigars, cigarillos) will increase from €114.15 to €120.50 per kilogram or per thousand units. Additionally, the excise on heated tobacco products will rise from €185.82 to €198.50 per kilogram, and “new tobacco products” will see an increase from €114.15 to €120.50 per kilogram.
The Croatian government estimates these tax hikes will generate an additional €74.7 million in budget revenue. They also cite public health benefits, stating that increased prices aim to reduce consumption, in line with World Health Organization commitments. However, Tokić argues the public health effect could be counterproductive. “After decades of unsuccessful struggle with smoking, Croatia is finally recording concrete positive results in a drastic drop in the number of smokers. This kind of excise duty will result in a massive return to tobacco cigarettes and the opening of a huge black market of uncontrolled products, which will be disastrous for citizens’ health,” he warned, noting the high annual death toll and treatment costs associated with smoking-related diseases in Croatia.
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