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A packet of tobacco costs 30 to 40 cents, and a packet of cigarillos can cost twice that – Executive Summary

A packet of tobacco costs 30 to 40 cents, and a packet of cigarillos can cost twice that – Executive Summary

The government’s 2024 state budget proposal foresees increased taxes on tobacco, with a total projected revenue of €176.6 million, with expanded taxes on nicotine-free e-cigarettes being the big news.

If previously the tax was determined according to the price of tobacco, with the more expensive paying more tax, the new rules specify that the tax burden depends on the amount of nicotine in each product.

On the other hand, the government also wants to “penalize” cheaper products (such as cigarillos or rolled tobacco) which therefore attract young people.

According to the document, the expansion of the scope of taxes to include nicotine-free e-cigarettes is also due to “the accelerated growth in consumption of these products in Portugal,” which constitutes “on the one hand a gateway for new consumers to adopt smoking.” Habits, on the other hand, pose a threat to public health as a result of the lack of control over these products.

In 2024, with the implementation of the new tax rates, the price of a pack of cigarettes could rise by between 30 and 40 cents, according to the observer, if the weight of the increased tax burden is transferred to the consumer.

In the case of cigarettes, which currently have lower taxes because they are cheaper (prices are around 2.50/3 euros), with the change, prices could double in the same way.

In the case of e-cigarettes with flavored liquids, the tax is now 12.5%, and if the liquids contain nicotine, the tax rate rises to 25%.

For e-cigarettes, vapor produced by a liquid heated by a battery, the tax rate is now 50%. In the case of rolled tobacco, which is the solution for many when tobacco prices rise, the tax will be 75% of the tax on a regular cigarette.

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