/ world today news/ A project for a new excise policy is about to provoke a cigarette war and lead to the expulsion of foreign companies from Bulgaria, “Trud” has learned.
The independent deputy Vencislav Varbanov has submitted a proposal, which will increase the price of luxury brands drastically – by 40%. He proposes that the ratio of the two rates in determining the excise tax be changed so that a greater burden falls on the percentage part, at the expense of the specific part.
The percentage rate is calculated as a fraction of the price of cigarettes, and the specific is a fixed amount per 1000 cigarettes. Currently, the percentage part of the excise tax is 23% of the market price, and the specific part – 101 BGN per 1000 pieces. Vencislav Varbanov proposes that the rates become 56% and BGN 25 per 1000 pieces, respectively.
Thus, the total burden of the excise tax will be maintained – at least BGN 148. However, these rates will increase the prices of the luxury brands, while the cheap ones will remain unchanged or may become cheaper.
“This means only one thing – the deputies have decided to expel the foreign companies or start a new price war, similar to the one in 2009,” Western companies commented to “Trud”. They have calculated that if the amendment is adopted, the state will lose revenue from excise taxes in the amount of 70 million. BGN per year.
If it comes into force, cigarettes that cost up to BGN 4.60 like the home brand Victory, they will not change their prices. However, there will be an increase for the imported “Marlboro”, “Dun Hill”, “Karelia”, “Parliament” and “Davidoff”. Cigarettes, which now cost BGN 6, will have to jump to BGN 8, and “Marlboro” from BGN 5 will become BGN 5.80.
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## World Today News Interview: The Looming Cigarette War
**Host:** Welcome to World Today News, where we unpack the stories impacting Bulgaria and beyond. Joining us today are two distinguished guests to discuss a fiery topic: the proposed changes to Bulgaria’s excise policy on cigarettes and the potential fallout.
We have with us **Mr. Ivan Petrov,** representative of the Bulgarian Association of Tobacco Producers, and **Ms. Maria Dimitrova,** a leading economist and expert in public health policies. Welcome to both of you.
**Section 1: Understanding the Proposal**
**Host:** Let’s start with the basics. Mr. Petrov, could you explain the proposed excise policy changes and how they differ from the current system?
**Mr. Petrov:** Certainly. This amendment, spearheaded by independent deputy Vencislav Varbanov, proposes a significant shift in the calculation of excise taxes on cigarettes. It aims to increase the percentage-based component, impacting mainly premium brands, while potentially lowering the fixed amount per 1000 cigarettes.
**Host:** Ms. Dimitrova, what are your initial thoughts on this proposal? Does it align with public health goals, and what are the potential economic repercussions?
**Ms. Dimitrova:** This proposal raises several concerns. While the intentions might be to curb consumption of luxury cigarettes, the method employed could have unintended consequences.
**Section 2: Impact on Different Stakeholders**
**Host:** Mr. Petrov, as a representative of tobacco producers, how do you expect this change to affect the industry in Bulgaria, particularly both domestic and international companies?
**Mr. Petrov:** This proposal creates a volatile environment. Foreign companies, already grappling with globalization’s challenges, may find this unsustainable and reconsider their presence in Bulgaria. Domestic brands, however, might see a temporary advantage.
**Host:** Ms. Dimitrova, this article mentions potential revenue losses for the state. Does this concern you?
**Ms. Dimitrova:** Definitely. Shrinking excise revenue could lead to cuts in vital public services or necessitate compensatory measures, potentially impacting other sectors of the economy.
**Section 3: Looking ahead – What are the Alternatives?**
**Host:** Given the potential negatives, are there alternative solutions that could achieve similar goals without causing market disruption?
**Ms. Dimitrova:** Absolutely. We could explore more nuanced approaches like gradually increasing the percentage-based excise across all cigarette brands, possibly coupled with stricter advertising regulations and smoking cessation programs.
**Host:** Mr. Petrov, from the industry standpoint, what measures do you believe would create a fairer and more sustainable environment?
**Mr. Petrov:** Clear, predictable regulations, coupled with open dialogue between policymakers, industry stakeholders, and public health experts are essential.
**Section 4: Final Thoughts**
**Host:** what are your final thoughts on this issue and its potential impact on Bulgaria?
**Ms. Dimitrova:** This is a complex issue requiring careful consideration. We need a balanced approach that addresses public health concerns while safeguarding economic stability and fostering a responsible tobacco industry.
**Mr. Petrov:** Transparency and collaboration are crucial. We urge the government to engage in an open dialogue with all stakeholders to find a solution that benefits Bulgaria as a whole.
**Host:** Thank you both for sharing your insights. This is a crucial conversation for Bulgaria’s future, and we hope this discussion sheds light on the complexities surrounding this critical issue.
