EXCLUSIVE – The government plans to increase taxation on cigarettes

Posted Sep 22, 2022, 7:09 PMUpdated on Sep 22, 2022 at 7:30 PM

The deadline for the presentation of the budget texts is approaching (the social security finance and financing bills will be examined by the Council of Ministers on Monday), but there are still thorny issues to be settled. And in particular the question of the price of cigarettes, in a context of high inflation.

The law currently provides for an automatic rule for increasing excise duties according to inflation, but not in relation to the price increase of year N-2, and with a cap at 1.8%. Which, if things remained as they were, would protect the tobacco market from the significant price increases that are increasingly affecting the entire economy.

The Ministry of Health is pushing

According to several sources, the government plans to change the legislation, with on the table the plan to remove the ceiling for the tax increase indexed to inflation, and to take the year N-1 as the basis. This would lead to increases in rights of 5% to 6% at the start of 2023 (depending on the inflation observed in 2022), or even 7.5% by adding the price increases observed in 2021 and 2022.

A project that would be integrated into the 2023 Social Security budget. And which is seen with a good eye by the Ministry of Health, whereas unlike the previous five-year term, when Emmanuel Macron had undertaken to raise the price of a pack of cigarettes to 10 euros, nothing has been said to be precise for this new legislature. The last increase occurred in November 2020.

The price of the package at more than 11 euros

The lowest price is now at 10.20 euros, and that of the best-selling brands at 10.50 euros (Marlboro, for example). With the scheme envisaged, the price of the packages would rise by around 70 cents, to more than 11 euros for the most part. And the price of a packet of rolling tobacco would exceed 15 euros.

“It would be logical to stick to inflation, there is no reason for prices to increase everywhere, except for cigarettes”, defends a deputy of the majority favorable to the project. But other voices are worried within the executive about the unpopularity of the measure, in a social context which already promises to be tense this winter, with the planned increases in the price of gas and electricity, and the end of the 30-cent rebate on fuel. “You have to be careful how the measure will be perceived,” said a government source.

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