Moldovan manufacturers of tobacco products oppose the game rules, which change hastily, without a thoughtful economic analysis of the market and the real possibilities of its players.
As noted by the publication Ekonomicheskoye Obozreniye Logos-Press, last year the Cabinet approved an excise calendar for 2021-2023, which excluded tax surprises and provided for an annual increase in excise taxes on cigarettes and tobacco sticks by 15%, while on cigarillos the rate remained at the level of 41% of the value in lei (MDL). Thus, 3-year clear rules of the game were established on the market. This fall, the Ministry of Finance proposed to change the excise policy again: to increase the excise tax for cigarillos and cigars at a rate of 41% of the cost, but not less than 959 lei per 1,000 pieces in 2022 and 41%, but not less than 1103 lei in 2023. The publication notes that this is a sharp jump in excise taxes - more than 300%! At the same time, the excise quota for cigarettes remained at the same level: a gradual growth of 15% per year. “In fact, the matter concerns the very equation of excise, which importers so sought and the local producers feared so much,” emphasizes the publication. As the director of the Tutun CTC tobacco plant Vladimir Capcelea told the newspaper, under the proposed scenario, the tobacco industry predicts multimillion-dollar losses, which will lead to an industrial collapse and a sharp reduction in payments to the budget: “I would like to note that the budgetary contributions of Tutun CTC only for 10 months of this year exceeded 200 million lei. In general, in 2022 we plan to allocate twice as much to the state treasury. Over the past 2 years, about 100 million lei have been invested in Tutun CTC, we continue to actively invest in production, developing the plant”. At the same time, the publication notes that changes in the excise policy are supported by all major importers - Philip Morris, JTI, BAT and Imperial Tobacco, which today account for about 80% of the total tobacco market and which operate mainly in the expensive segment. Philip Morris cites the example of Ukraine: there, a sharp increase in the excise tax on cigarettes led to an increase in the shadow market, which reached a historic maximum in the last 5 years, amounting to 18%. The tobacco excise tax from neighbors is growing by 20% per year, and the same rate is envisaged in 2022. That is why the smoker is leaving the shadow segment, the share of which continues to grow. JTI Moldova noted that since 2021 Ukraine has equalized the excise tax on cigarillos with the excise tax on cigarettes due to the growth of the category of cigarillos. Prior to that, a lower excise tax was applied to cigarillos. The same situation is observed in Moldova, where the average excise tax on cigarillos is several times less than on classic cigarettes. The proposals of importers sent to the Ministry of Finance through various business associations provide for a decrease in the volume of the low-price segment, strengthening the position of imports. “Importers aimed at cigarillos, which in 90% of cases are produced by local producers. For cigarillos, a significant increase in excise taxes was proposed, which increases their value to the level of classical ones,” emphasizes the Ekonomicheskoye Obozreniye Logos-Press. //19.11.2021 - InfoMarket.
