Seimas approves tobacco excise tax hike plan

The Lithuanian government backed on Thursday the government's proposal to raise excise tax rates for cigarettes and other tobacco products, including liquids used in e-cigarettes, and to subject nicotine free e-liquids to an excise duty starting next March.

The Seimas approved the government's three-year plan for increasing the excise duties by 6-14 percent in a vote of 100 to two with 18 abstentions.

The plan calls for raising the tax rate for cigarettes to 62.25 euros per 1,000 cigarettes and setting the minimum combined excise duty per 1,000 cigarettes at 102 euros. The rates will increase to 65.7 and 108.5 euros in 2020 and will go further up to 69.4 and 115.5 euros in 2021, respectively.

The excise tax rate will rise to 42 euros per kilogram of cigars and cigarillos and 68.6 euros per kilogram of smoking tobacco. The rates will go up to 48 and 78.5 euros in 2020 and to 55 and 90 euros in 2021, respectively.

E-liquids will be taxed at a rate of 0.1 euros per milliliter.

The excise rate hikes are expected to generate an estimated 11 million euros in additional budget revenue next year and another 10 million euros in 2020 and 2010 each.

Source: BNS
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